Operating income was down from BD2.239 million in the first quarter of 2010 to BD 459,000 for the first three months of 2011.The loss per share was 1.5 fils on a year- to- date basis, against a profit of 3 fils per share for the same period of the previous year. The slowdown in revenues and operating profit reflects the effect of the political uncertainty in the MENA region and excessive volatility in regional equity and fixed income markets.
While January and February were loss making months, the markets rebounded in March and the Firm was able to recover partially its losses. SICO maintained a strong capital base ending the quarter, after paying a BD 2.552 million dividend, with BD 54.471 million in shareholder equity compared to BD 56.746 million as of 31st, December 2010. SICO’s posture continues to be prudent, with a strategy that remains focused on maintaining a strong balance sheet, placing it to take advantage of opportunities and capitalise on market recovery.
Net interest income during the year decreased to BD 232 thousand (Q1 2010: BD 446 thousand), while fee and commission income grew to BD 565 thousand (Q1 2010: BD 513 thousand). Brokerage and other income fell to BD 316 thousand (Q1 2010: BD 360 thousand). Net Investment loss was BD 654 thousand versus a profit of BD 920 thousand in the first quarter of 2010.
“With considerable political uncertainty and volatility in regional markets during January and February, our firm was affected during the first quarter, as almost all our revenue generators saw a substantial reduction in flows,” said Anthony Mallis, Chief Executive Officer of SICO.
“Although we will continue being affected by unusual market volatility if greater levels of uncertainty continue, we are confident that SICO is well placed to benefit from market opportunities that are arising backed, by our well capitalised position and fundamentally sound business model,” he added.
“While January and February, witnessed major falls in the regional stock and bond markets, which had a bearing on this quarter’s losses, the improvements seen in March, lead us to believe that the markets are somewhat stabilising”.
SICO closed the first quarter of 2011 with total assets of BD 94.9 million (4Q10: BD 81.228 million), of which cash and deposits made up 53.8% (or BD 51.06 million) compared to 43.5% in the fourth quarter of 2010 or (4Q10: BD 35.4 million). The Firm had BD29.123 million in available-for-sale securities (2010: BD24.375 million) and BD 10.302 million in its trading portfolio (4Q10: BD 16.643 million).
Total expenses, which includes, both staff overheads and general administration and other expenses grew in the first quarter of 2011 to reach BD1.086 million from BD 959 thousand the same period the previous year.
SICO is a wholesale bank offering a selective range of investment banking services, including asset management, brokerage, corporate finance and market-making, on a regional basis and with a particular emphasis on Bahrain.