MANAMA: Al Baraka Banking Group B.S.C. (ABG), the leading Islamic banking group based in the Kingdom of Bahrain, reported a net profit of US$ 154 million for the first nine months of 2017.
The Group in a statement said that the first nine months of the year 2017 showed good increases in assets, with total assets increasing by 6%, financing and investment portfolio by 9%, customer accounts by 6% and total equity by 24% compared to end December 2016.
“The financial and operating results we achieved during the first nine months of 2017 are good by all standards, taking into account the current international and regional banking situations and slowdown in economic growth in major countries and the fluctuation of currencies. We would like to emphasize that our cautious and selective approach, together with the extreme caution exercised towards the markets and customers in implementing our financial and investment programs has achieved the suitable results,” Abdulla Ammar Al Saudi, Deputy Chairman of ABG, who chaired the board meeting that approved the financial results said.
“The overall profitability of the Group was affected during the period as a result of the decrease in local currencies in five countries in which ABG Units are operating. This effect could be noted from the reported figures for the same period compared to that of last year, where total operating income decreased by 7% to US$ 735 million from US$ 789 million for the same period last year and net operating income by 12% to US$ 318 million from US$ 362 million for the same period last year.
“Net income, in addition to the effect of the decline in local currencies, was also affected by the increase in the amount of prudential provisions, resulting in a net profit of US$ 154 million for the first nine months of 2017, a decrease of 24% from US$ 204 million for the same period last year. Net income attributable to Equity Holders of the Parent for the first nine months of 2017 was US$ 97 million, down by 17% compared from US$ 116 million for the same period last year.”
For the third quarter of 2017 the net income was less by 32% to reach US$ 41 million compared to US$ 61 million for the same period last year. While net income attributable to the parent for the third quarter of 2017 was US$ 27 million, a 24% decrease from US$ 35 million for the same period last year.
During the first nine months of 2017, Al Baraka Banking Group has continued to implement its business plan in order to maintain markets expansion initiatives and diversification of source of income through its banking units located in 15 countries.
“On the other hand, the consolidated balance sheet items of Al Baraka Banking Group achieved good increases at the end of September 2017 compared to end of December 2016, were total assets grew by 6% to reach US$ 24.9 billion, though the growth rates of these assets were also affected by the decline in value of local currencies in some countries where the Group operates against the US dollar, the currency of reporting the Group’s consolidated statements. The Group maintained a large portion of these assets in the form of liquid assets in order to seize the financing opportunities and to face the fluctuations in the markets.
“Operating assets (financing and investments) amounted to US$ 19.1 billion as at the end of September 2017 compared to US$ 17.5 billion at the end of December 2016, a good increase of 9%.
Customer accounts as at the end of September 2017 also increased over its end of December 2016’s level by 6% and reached US$20.4 billion, representing 82% of total assets, which indicates the continued customer confidence and loyalty in the Group and growing customer base and expansion in the branch network.
Total equity reached US$ 2.5 billion at the end of September 2017, increasing substantially by 24% compared to December 2016. This reflects the issuance of US$ 400 million Additional Tier 1 Perpetual Sukuk by the Group during last May. As an indication of the strength of the capital base of the Group, the total equity to total assets ratio reached 10% at the end of September 2017.