“Performance for the current quarter was significantly improved on the preceding quarter of 30 June 2013 which had closed with net income of $0.974 million due to $5.3 million fair value losses booked in that quarter as part of the Bank’s audit closing for the 18 months period ended 30 June 2013,” the bank in a statement said.
Total revenue for the current quarter increased 20% over the previous quarter to $5.1 million with income from investment banking activities representing the lion’s share of it at $4.6 million compared to $3.4 million in the previous quarter. In keeping with its prudent policy on provisioning, the Bank booked a collective provision charge of $0.14 m for the quarter, bringing total collective provisions to $4 million providing a cushion against impairments.
The Chairman of the Board of VCBank, Dr. Ghassan Ahmed Al Sulaiman, in announcing the excellent results highlighted the significance of the continued strong contribution to total income from investment banking activities which forms the bedrock of the Bank’s activities and solid results.
The Chairman said that the Bank’s balance sheet has continued to grow with total assets increasing to $230.8 million currently compared to $221.5 million at 30 June 2013. Being largely unleveraged, total assets principally comprises shareholders’ equity which has grown to US$ 203.4 million now from $200.5 million at 30 June 2013, a 6% growth on an annualized basis. The Bank’s capital adequacy ratio currently stands at a very robust 47% compared to the regulatory minimum of 12%, and fiduciary assets under management stands at $957 million now compared to $925 million as at 30 June 2013.
Board Member and Chief Executive Officer Abdullatif Mohamed Janahi also highlighted the seven consecutive quarters of positive results and stressed that the Bank is moving forward with renewed strength and confidence. The Bank has built particular expertise in key areas such as healthcare, agribusiness, oil and gas, and shipping; and in the more economically and politically stable markets in the MENA region.
Both the Chairman and the Chief Executive highlighted the conclusion of an iconic deal in the United Kingdom residential market that has strengthened the Bank’s portfolio and boosted its reputation for attractive and innovative offerings, and stressed that the Bank is currently working on a number of attractive deals which are expected to crystallize during the coming quarters.
As reported earlier, the Bank changed its fiscal year from January-December to July-June with effect from 30 June 2013 after necessary regulatory and shareholder approvals in a move designed to align the Bank’s reporting year with the annual cycle of investment structuring and placement, and minimize the impact of the holiday season. Management continues to target improvements in revenue growth and reduced operating costs to build sustained profitability, whilst maintaining adequate liquidity and building a solid foundation for providing acceptable returns to our shareholders.
The Bank’s annual general assembly has been scheduled for 9 December 2013 in Bahrain at which the audited financial statements and the report of the board of directors on the operations for the period ended 30 June 2013 will be presented for approval.
“These positive results are testimony to the Bank’s high standards of performance and the effectiveness of its investment strategy. The Bank has an investor base that has been and remains immensely supportive, and these results wouldn’t have been possible without their trust and continued support of VCBank’s Investment products. We are confident that VCBank will be able to continue to build on this excellent performance into the future with the guidance and support of the Central Bank of Bahrain and the Board of Directors and by continuing to adapt and capitalize on changes and opportunities in the market,” Janahi, said.