The announcement, by Ithmaar Bank Chairman His Royal Highness Prince Amr Mohamed Al Faisal, followed the review and approval, by the Board of Directors, of the Bank’s consolidated financial results for the nine month period ended 30 September 2012.
The results show a net loss of $15.6 million for the nine month period as compared to a net profit of $6.7 million for the same period last year. This is despite operating income increasing 14.21 per cent to $161.9 million for the period.
“On behalf of the Ithmaar Bank Board of Directors, I am pleased to announce that all Ithmaar Bank’s core business areas are continuing to do well,” said HRH Prince Amr. “This is reflected in the growth in operating income by 14.2 per cent, as well as the total income which grew about 4 per cent to $356.8million, compared to $343.4million for the same period last year. Expenses during the period have also marginally decreased, by 3.6 per cent, to $147 million compared to $152.5 million for the same period last year due to cost rationalisation,” he said.
“In the nine month period ended 30 September 2012, Ithmaar took significant net impairment provisions of $23.9million, compared to a provision write back of $22.5 million during the same period last year,” said HRH Prince Amr. “The provisions are due, in part, to Ithmaar’s efforts to reflect the decline in fair value of certain investment assets and to build adequate provisions on its financing portfolio,” he said.
“This included a net loss attributable to shareholders of $19.3 million for the three month period ended 30 September 2012, compared to a net loss of $1.6 million for the same period last year,” HRH Prince Amr.
Ithmaar Bank Chief Executive Officer and Member of the Board, Mohammed Bucheerei, pointed to continuing growth in financing during 2012 as a reflection of stable growth in core business.
“Financing has increased by 17.3 per cent to $3.2 billion as at 30 September 2012 from $2.7 billion as at 31 December 2011,” said Bucheerei. “The investment portfolio has decreased, particularly investment securities, which decreased by 21.2 per cent to $964.5 million as at 30 September 2012, from $1.2 billion as at 31 December 2011,” he said.
“Customer current accounts, due to banks, financial and other institutions and investors have increased by 2.6 per cent,” said Bucheerei. “Unrestricted Investment Accounts have also increased, by 9.1 per cent, to $1.61 billion as at 30 September 2012, from $1.48 billion as at 31 December 2011. Shareholders’ equity also remains stable, at $572.3 million,” he said.
“The financial results bear testimony to the success of the board-approved strategy to focus on our core retail and banking operations and to develop Ithmaar into one of the region’s leading Islamic retail banks,” said Bucheerei. “To help realise this vision, and in effort to increase our focus on further developing our core business activities, Ithmaar announced last month (ed note: October 2012) plans to merge with one of our Bahrain-based associates, the First Leasing Bank, and to convert the banking licence of our wholly-owned subsidiary, Faisal Private Bank (FPB) in Switzerland to a family office, effective 30 June 2013. As an interim measure, FPB has ceased to accept any new business effective 1 November 2012. Ithmaar has initiated the process of establishing an Asset Management Company (Family Office) in Switzerland to provide continued service to investors in the existing funds managed by FPB. Ithmaar is currently finalizing FPB’s transition plan to Family Office and the legal and regulatory formalities are being completed,” he said.
“In the third quarter of 2012, Ithmaar continued to develop its retail banking operations, adding new products and improving its services,” said Bucheerei. “For example, Ithmaar has recently launched a significantly improved version of its already popular prize-linked savings account, Thimaar,” he said.