ABG sustains growth patterns despite challenges

Mr. Adnan Ahmed Yousif, Member of the Board of Directors and President and Chief Executive of ABG

MANAMA: The Bahrain based global Islamic banking major, Al Baraka Banking Group B.S.C (ABG) has sustained growth patterns by defying the international and regional developments and conditions which continued in the first half of 2017.

The Group on Monday said that it had achieved US$ 70 million net income attributable to equity holders of the parent during the first half of 2017 with a decline of 14% compared to the same period last year.

“The instable economic climate including the economic and financial instability in some main countries were ABG operates posed serious challenges,” Mr. Adnan Ahmed Yousif, Member of the Board of Directors and President and Chief Executive of Al Baraka Banking Group, said, while commenting on the regional and international developments.

In addition to the decline in oil prices, he said, the decline in currencies value of some of our units’ countries against the US dollar, the currency of the Group’s consolidated reports,” Mr Adnan added.

“But despite all these developments, we were 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. The great success of the first sukuk issuance was a global endorsement of the Group’s prestigious position.”

“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 its shareholders. As we expected at the beginning of the year, the results of the first quarter of this year were affected by the downward trend in the currencies of some of the countries in which the Group’s units operate against the US dollar during the second half of last year 2016, but we expect the Group’s results to improve during the rest of the year,” Mr Adnan, added.

“The total number of branches of our units reached 667 branches at the end of June 2017 compared to 697 branches earlier this year, following the merger of some branches in Pakistan due to the merger of Al Baraka Bank Pakistan. The total staff of the Group’s branches reached 12,623 at the end of June 2017, which 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,” Mr Adnan said while commenting on the Group’s plans to expand its branch network.

“In terms of geographical expansion across the Arab region and at international level, we completed all necessary procedures to launch our banking unit in Morocco, and we plan to start its activities in September 2017 with our partners in the new bank the Moroccan Bank for Foreign Commerce (BMCE Bank), under the name BTI Bank. 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.”

“As we mentioned earlier, completed with great success the issuance of its first Islamic Sukuk in the amount of US$ 400 million. The issue was well received in the GCC, Asian and European markets, and was five times oversubscribed, receiving subscriptions of US$ 1.6 billion against the initial requirement of US$ 300 million. As a result of the high subscription, it was decided to raise the issue size from US$ 300 million to US$ 400 million. The Sukuk issue is an Additional Tier 1 Perpetual Sukuk that is compliant with the Central Bank of Bahrain rules and regulations. Ninety-four banks participated in the subscription, where 70% of subscription coverage came from Arab markets, 15% from Asian markets and 15% from European markets. This issuance came as part of our strategy to expand our capital base, to grow in our existing and new markets and to strengthen the business of our banking units, and this is the first of its kind in terms of size to be issued by a private sector institution from the Kingdom of Bahrain. This confirms the strong banking and finance reputation and the prestigious position of the Bahrain Financial Center as well as the confidence international markets have in it. Moreover, all indicators confirm once again the prestigious position and outstanding reputation of Al Baraka Banking Group in regional and global financial markets as a result of its strong track record, its strong financial, technical and human resources, and its broad geographic network.”

“The social responsibility represents a core pillar in the business model of the Group. During the first half 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.

“The focus on training through Al Baraka Academy continued in first half of 2017 by providing training courses to the staff and we have plans to organize many training workshops specialized in different fields of Islamic banking for staff during 2017 and beyond. 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.”

“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,” Mr Adnan, said while talking about the economic climate during the remaining part of 2017.

The President & Chief Executive of ABG concluded his statement by praising 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 planned results for the Group.

Al Baraka Banking Group (B.S.C) is licensed as an Islamic wholesale bank by the Central Bank of Bahrain, listed on Bahrain Bourse and Nasdaq Dubai stock exchanges. It is a leading international Islamic banking group providing its unique services in countries with a population totaling around one billion. It is jointly rated BBB+ (long term) / A3 (short term) on the international scale and A+ (bh) (long term) / A2 (bh) (short term) on the national by Islamic International Rating Agency & Dagong Global Credit Rating Company Limited, and by Standard & Poor’s at BB+ (long term) / B (short term).

Al Baraka offers retail, corporate, treasury and investment banking services, strictly in accordance with the principles of the Islamic Shari’a. The authorized capital of Al Baraka is US$ 1.5 billion, while total equity is at about US$ 2.5 billion. The Group has a wide geographical presence in the form of subsidiary banking units and representative offices in fifteen countries, which in turn provide their services through over 667 branches. Al Baraka currently has a strong presence in Turkey, Jordan, Egypt, Algeria, Tunisia, Sudan, Bahrain, Pakistan, South Africa, Lebanon, Syria, Iraq and Saudi Arabia, including two representative offices in Indonesia and Libya.

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