VCB reports $14.1m income in Q2
The bank sustained the profitability patterns for the second quarter in a row with the bank’s net profit and total income for the 2nd quarter of 2012 amounted to $14.1 million, compared to a loss of $7.7 million for the corresponding in 2011.
Total income increased five-fold to US$ 20.7 m for the half year compared with $4.8million in the corresponding period in 2011, with income from investment banking activities rising significantly to $18.2 million compared with $1.5 million for the corresponding period in 2011. Concurrently, total expenses decreased to $5.8 million from $7.5 million for the corresponding period in the previous year as a result of rigorous cost reduction efforts instituted in response to the current market crisis. The results are also net of additional provisions of $1.3 million which the board has booked in the period as a measure of prudence in the light of current market conditions. The bank’s balance sheet has also seen good improvement with total assets increasing to $209.6 million as at 30 June 2012 from $198.5 million at the end of 2011 whilst continuing to remain unleveraged, and shareholders’ equity grew 6.9% to $192 million from $179.7 million at year-end 2011.
Chairman of VCBank, Dr. Ghassan Ahmed Al Sulaiman highlighted the significance of the strong contribution to total income from investment banking activities, which increased dramatically by 11 times to $18.1 million from $1.52 million for the corresponding period in 2011.
“These encouraging results have been achieved despite the challenges facing the banking sector in the region and the world and the investment sector in particular. The Bank’s results confirm the feasibility of our plans and strategies that have been followed in accordance with the new strategy of the Bank that includes restructuring the investments and focus on venture capital and private equity sector in the MENA region. Additionally, it supports and confirms our commitment to provide shareholders and investors with acceptable rates of return,” he said.
Strongly capitalized at $250 million, with liquid assets of $10.3 million, and currently unleveraged, VCBank is a financially strong and solid institution. At the end of June 2012, our capital adequacy ratio was 43 per cent, considerably higher than the minimum requirement of the Central Bank of Bahrain, while assets under management had risen by 12% to $863 million compared to $749 million as at 30 June 2011,” Dr. Al Sulaiman, added.
“VCBank was able to achieve two consecutive quarters with impressive results in the first half of 2012, and these results affirm that Venture Capital Bank is moving in the right direction towards achieving strong growth. Our results underline the success of our strategic focus on key sectors in which we have built particular expertise, such as healthcare, agribusiness, oil and gas, and shipping; and on more economically and politically stable markets in the MENA region,” Abdullatif Mohamed Janahi, Board member and CEO said.
“The results reflect the Bank’s high performance and the effectiveness of its diversification of investments. We are confident that VCBank will continue its excellent performance into the future through flexible strategies with the ability to adapt and capitalize on changes and opportunities in the market,” Janahi, added.
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