Economic instability poses serious challenge to banking industry

Mr. Adnan Ahmed Yousif, President and Chief Executive ABG

MANAMA: The international and regional developments and conditions continued in the first quarter of 2017 pose serious challenges for the Al Baraka Banking Group which includes the economic and financial instability in some countries where the Group operate.

Adnan Ahmed Yousif, Member of the Board of Directors and President and Chief Executive in a statement on the first quarter results also mentioned the impacts of the decline in oil prices and the decline of currencies value of some of our units’ countries against the US dollar, the currency of the Group’s consolidated reports.

Bahrain-based Islamic banking major, Al Baraka Banking Group B.S.C (ABG), reported a net income of $34million and total operating income of $249million in the first Quarter of 2017.

But despite all these developments, Adnan said, the ABG was able not only to maintain our good profits and operational positions, but also to enhance our precautionary measures in the context of sound policies and strategies developed by the Group and are implemented by all units.

“We are very pleased to see the contribution of all our banking units in the positive results of the Group, as evidenced by the excellent results recorded and the cash dividends distributed to their shareholders for their financial results for 2016. The Jordan Islamic Bank distributed 15% cash dividends and 20% bonus shares, Al Baraka Bank Syria 15% cash dividends, Al Baraka Bank Algeria 30.11% cash dividends, Al Baraka Bank Turkey 5% cash dividends, Al Baraka Bank Egypt 15% bonus shares and Al Baraka Bank Sudan 12% cash dividends and 18% bonus shares.”

“We opened five new branches in the first quarter of 2017 to bring total branches to 702 branches with total staff of 12,593. This reflects the clear role of our units in creating rewarding jobs to citizens in their communities. In addition, this policy is one of main pillars of growth in businesses and profits in the Group,” With regard to the Group’s plans to expand its branch network, the President & Chief Executive said.

“In terms of Arabic and international geographical expansion, we completed all necessary procedures to launch our banking unit in Morocco, and we plan to start its activities during the second half of this year with our partners in the new bank the Moroccan Bank for Foreign Commerce of Africa (BMCE Bank), which is one of the oldest and largest private Moroccan banks, which was founded in 1959 and located in 22 countries. The new bank will be under the management of Al Baraka Banking Group and will operate within its network of subsidiary banking units, which are currently located in 15 countries. The entrance into the Moroccan market is a very important achievement, which is considered one of the major markets in the Maghreb and Africa, and will achieve greater diversity in building assets portfolios and revenue sources for the Group.”

“For his part, Al Baraka Bank Algeria raised its social capital from DZD 10 billion to DZD15 billion. The increase was made through a free distribution of five million new shares at a par value of DZD 1,000 for the shareholders, which are Al Baraka Banking Group with an authorized capital of US$ 1.5 billion and the Agriculture and Rural Development Bank (Algeria) with a capital of DZD 54 billion. This increase will strongly contribute to the expansion of the Bank’s activities and business in the Algerian market. Al Baraka Bank of Algeria is considered one of the most liquid banks in the banking market. The stress tests conducted every six months and submitted to the concerned bodies in Algeria are further proof of the strength and soundness of the Bank.”

“Al Baraka Turk Participation Bank had also concluded successfully a syndicated Murabaha facility for an amount of US$ 213 million with the participation of 12 international banks from 8 countries from GCC, MENA and Europe participated in the facility. This issue comes after a series of similar successful issues since 2010 and also in large amounts. We are indeed delighted at the large success of the syndicated financing deal, despite the volatile financial markets and international economic situation, which endorses the reputation of Al Baraka Turk Participation Bank and its distinguished position in the Turkish market, based on the strength of its financial position and growing performance over the past many years, as well as the distinguished reputation and position of the parent company, Al Baraka Banking Group, regionally and internationally.”

“The social responsibility represents a core pillar in the business model of the Group. During the first quarter of 2017, the Group continued to implement its social responsibility program based on linking the social responsibility programs and activities of the units and the Group with the Global Goals for Sustainable Development, which was adopted by the United Nations General Assembly. These goals will concentrate on adding 50,000 jobs across the countries where we operate and providing finance and donations to a variety of educational institutions and children hospitals, cancer hospitals, diabetic hospitals, kidney dialysis units”.

“We continued during the first quarter of 2017 to focus on providing training courses through Al Baraka Academy, which intends to organize many training workshops specialized in different fields of Islamic banking for staff during 2017 and next years. We also continued providing modern online training programs for the employees of the Group and its units that are related to compliance, sanctions and KYC regulations and others. Besides we continued our efforts to embody the values and principles of our unified brand, which is based on the concept of partnership with customers, in all the products and services we offer.”

“For the remaining part of 2017, we expect the fluctuations in regional and international markets will continue, which creates difficult business environment for international banks, but we will continue our precious policy and investment of our large financial and technical resources in addition to wide geographical network of the units of the Group towards maximizing the returns for our shareholders and the investors in the Group.”

The President & Chief Executive of ABG praised the tireless efforts of the executive management at Group Head Office, the executive management teams of the banking units of Al Baraka Banking Group and related parties that played an instrumental role in achieving these satisfactory results for the Group.

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