For second quarter, net profit improved to BD 900,000, compared with a loss of BD 457,000 for the 2Q12; while income rose to BD 2.13 million, compared with BD 699,000 for the corresponding period for 2012. Basic earnings per share rose to 2.1 Bahraini fils (2Q 12: negative1.07 fils).
Net interest income, net fee and commission income, and brokerage and other income during 2Q13 contributed BD 340,000, BD 547,000 and BD 455,000 respectively to operating income; while net investment income contributed BD 783,000. Total operating expenses for the period were BD 1.22 million.
As at 30 June 2013, total balance sheet footings increased by 21% to BD 94.96 million from BD 78.45 million at the end of 2012. Assets under management grew by 14% to BD 257 million (BD 226 million at the end of 2012), reflecting the continued strong performance by SICO’s asset management business. Assets under custody with the Bank’s wholly-owned subsidiary – SICO Funds Services Company (SFS) -grew by 50% to BD1.24 billion (BD 824 million at the end of 2012).
Year to date, brokerage and other income have increased by over 70% to BD 685 thousand (H1 2012 BD 402 thousand) along with net investment income, which grew by 35% to BD 1.92 million (H1 2012 BD1.42 million); also net interest income and net fee and commission income improved to some extent to BD 655 thousand and BD 1.11 million respectively. For the first half of 2013, total operating expenses, which include staff overheads, general administration and other expenses, were BD 2.39 million, compared with BD 2.2 million for the corresponding period in 2012.
“International and regional markets started the year on a positive note, with confidence levels increasing as a result of a brighter global economic outlook, particularly in the GCC and the United States of America, and a belief that Euro-land has seen the worst,” Anthony Mallis, Chief Executive Officer of Securities & Investment Company, said.
“However, volatility in the global fixed income and equity markets which started in May and culminated in June impacted the second quarter’s results through losses in our trading book, which is marked-to-market and thus impacts the income statement’. Overall the trading activities for the second quarter were substantially profitable.”
“It is particularly encouraging that all core business areas contributed to the bottom line, with 35% of revenues coming from non-trading activities,” he added.
SICO continued to maintain a strong capital base, ending the first six months of the year with shareholders’ equity of BD 57.2 million, and a strong consolidated capital adequacy ratio of 59.65 per cent. The Bank currently has 40.6 per cent (or BD 38.5 million) of its balance sheet in cash and deposits, compared with 41.5 per cent (or BD 32.5 million) at the end of 2012. Available-for-sale securities at the end of June 2013increased to BD 29.6 million (end-2012: BD 21.8 million), while investments at fair value through profit or loss account rose to BD 21.0 million (end-2012: BD 16.1 million).
Anthony Mallis highlighted a number of important operational and marketing developments during the first half of the year. These include strengthening SICO’s management team with the appointment of Najla Al Shirawi to the newly-created position of Deputy Chief Executive Officer. Additionally, SICO’s new core banking system first and most important phase became fully and successfully operational during the earlier part of the year. The Bank also enhanced its status as a leading institutionally-focused GCC public markets asset manager with receipt of the highest MENA equity fund gradings from S&P Capital IQ; and the launch of a new SICO Fixed Income Fund, which has been listed on the Bahrain Bourse.
“We expect the positive momentum to continue for the rest of the year, with increased revenues in the areas of asset management, brokerage and corporate finance. To be noted is that International investors are beginning to take a greater interest of the GCC, which we believe will be beneficial to our business. Of relevance in terms of the next quarter, is that there is an attractive pipeline of transactions and mandates that are materializing in the third quarter of this year,” Mallis said.