The Bank reported net profit of $15 million and total revenue of $27.9 million for the nine months ended 30 September 2012 compared with a loss of $10.3 million for the corresponding period in 2011. Net profit and total revenue for the 3rd quarter of 2012 amounted to $2 million and $8 million respectively, compared to a loss of $2.8 million and total revenue of $1.4 million for the corresponding 3rd quarter of 2011.
Total revenue increased six-fold to $ 27.9 million for the nine months compared with $4.2 million in the corresponding period in 2011, with income from investment banking activities rising significantly to $24.2 million compared with $2 million for the corresponding period in 2011. Concurrently, total expenses decreased to $7.9 million in the current period as compared to $10.9 million for the corresponding period as a result of rigorous cost reduction efforts instituted in response to the current market crisis. The results are also net of additional impairment provisions of $3 million plus fair value losses of $2 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 nevertheless seen good improvement with total assets increasing to $207.6 million as at 30 Sep 2012 compared to $198.5 million at the end of 2011 whilst continuing to remain unleveraged, and shareholders’ equity grew 7.9% to $194 million from $179.7 million at 31 December 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 12 times to $24.28 million from $ 2.01 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 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.
“Strongly capitalized and currently unleveraged, VCBank is a financially strong and solid institution. At the end of Sep 2012, our capital adequacy ratio was 42 per cent, considerably higher than the minimum requirement of the Central Bank of Bahrain, while fiduciary assets under management had risen by 15% to US$ 876 million compared to $762 million as at 30 Sep 2011,” Dr. Al Sulaiman, said.
“VCBank has been able to achieve three consecutive quarters with impressive results in the first nine months of 2012, and these results affirm that the Bank is moving in the right direction towards achieving strong growth. Our results underline the success of our strategic focus on key sectors in which we have built particular expertise, such as healthcare, agribusiness, oil and gas, and shipping; and in the more economically and politically stable markets in the MENA region,” Board Member and Chief Executive Officer Abdullatif Mohamed Janahi, said.
The first nine months of this year witnessed the conclusion of a number of deals that helped strengthen our current investments. In the first half of the year VCBank took an indirect investment in 65% of the equity of Göknur Foods Import Export Trading & Distribution Company in Turkey, in a deal valued at US$ 93.7 million, which was followed on in the third quarter with the acquisition of an additional 12.3% stake in a deal valued at US$ 17.7 million. Established in 1993, Göknur is the largest fruit juice concentrate and fruit puree producer and exporter in Turkey, with a 50 per cent market share.
“The results reflect the Bank’s high standards of performance and the effectiveness of its investment strategy. We are confident that VCBank will continue to build on this excellent performance into the future with the support of its Board, shareholders and investors and by continuing to adapt and capitalize on changes and opportunities in the market,” Janahi, said.