Bahrain: Bank ABC Islamic – today announces its financial
results for the nine months ending 30 September 2020.
Covid 19 continues
to impact most of our clients across different geographies. The pandemic
combined with low profit rate environment and depressed oil price resulted in
an overall slowdown of business momentum, particularly in the corporate sector.
However, we remained active in the institutional and sovereign space during the
year and successfully led 8 Sukuk mandates and 2 Syndications.
The Bank’s top
line performance has been satisfactory with 2% growth on a year-on-year basis
in total operating income. Net profit for the period was lower at US$22.3 million
as compared to US$28.9 million during same period last year mainly on account
of higher ECL (Expected Credit Losses). The increase in ECL during this period
was a combination of a specific provision related to a client fraud in UAE
combined with forward looking FAS 30 ECL charge. In
making estimates for the latter, the Group and Bank have stress tested the
macroeconomic factors conservatively in our ECL model.
Performance (three-month period):
profit for the third quarter was US$7.9 million compared US$9.9 million reported
in the third quarter of last year.
operating income was US$11.9 million compared to US$12.3 million for the same
period of last year.
expenses were US$1.4 million, compared to US$1.8 million for the same period of
charges for the period were US$2.5 million compared to US$0.5 million reported
during last year.
Business Performance (nine-month period):
profit for the first nine months was US$22.3 million compared to US$28.9
million reported in the first nine months of last year.
operating income rose to US$35.3 million, 2% higher compared to last year of US$34.6
expenses were US$5 million compared to US$5.6 million for the same period of
charges for the period were US$7.6 million compared with a write
back of US$0.2 million reported during last year.
Islamic Bank’s total assets stood at US$2.152 billion as of September 30, 2020 compared
to US$2.079 billion at 2019 year-end.
equity at 30 September 2020 stood at US$287 million compared to US$365 million
at 2019 year-end. The decrease is mainly due to the US$100 million dividend
payment to the shareholders made during the period.
Bank’s capital base remains very strong with a capital adequacy ratio of 33.5%,
predominantly Tier 1, which totalled 32.5%.
Commenting on the
results, Mr. Hammad Hassan, Managing Director of Bank ABC Islamic, said, “We
are pleased with our performance against the backdrop of the Pandemic and
market uncertainties that we are facing. We witnessed some recovery this third
quarter which we capitalized upon.
We will continue
our focus on asset quality and reducing cost to face the lasting impact of these
extreme market conditions.”
Managing Director of Bank ABC Islamic