Bahrain-based Islamic investment bank, Venture Capital Bank (VC Bank), reported a net profit of $15 million for the year ended 30 June 2014 representing an 84% increase over the prior 12 month period net profit and a return on net paid up capital of 8.3 %.
The Bank reported a net profit of US$ 15 million from total income of US$ 23.7 million for the year compared with a profit of US$ 8.1 million from total income of US$ 15.3 million for the prior year ended 30 June 2013. Net profit and total revenue for the final quarter ended 30 June 2014 amounted to US$ 9.7 million and US$ 12.4 million respectively compared to $ 1 million and $ 4.3 million respectively for the comparative quarter ended 30 June 2013. These results are after recognition of fair value losses and impairment allowances totaling US$ 4.6 million in the year ended 30 June 2014 (2013: fair value losses and impairments of US$ 10 million in the year ended 30 June 2013).
Total balance sheet assets at 30 June 2014 amounted to US$ 249 million, a 13% growth over the year with the balance sheet remaining unleveraged but for a modicum of US$ 10 million medium term debt, and shareholders’ equity has grown by 8% to US$ 216.4 million at 30 June 2014 compared to US$ 200.5 million at 30 June 2013. Total assets under management has also grown 8% to US$ 1.24 billion now compared to US$ 1.1 billion as at 30 June 2013. The Bank’s capital adequacy ratio currently stands at a very robust 46.5 per cent, considerably higher than the minimum requirement of the Central Bank of Bahrain of 12%.
The Chairman of the Board of VCBank, Dr. Ghassan Ahmed Al Sulaiman, in announcing the excellent results highlighted the significance of the rebound to profitability by the Bank and the strong contribution from investment banking activities which remains the bedrock of the Bank’s performance.
“These encouraging results have been achieved despite the very challenging conditions in the region and the investment banking sector and confirm the success of our plans and strategies that included an organizational restructuring and a refocusing on growth sectors in the region and globally. Additionally, it supports and confirms our commitment to provide shareholders and investors with acceptable rates of return,” Dr. Ghassan, added.
In announcing the results, board member and Chief Executive Officer Abdullatif Mohamed Janahi said that the bank is well capitalized with a strong asset base and an active pipeline of deals, and looks to the years ahead with strength and confidence. These results affirm that the Bank is moving in the right direction towards achieving strong growth and 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.
“The year ended 30 June 2014 has witnessed the conclusion of a number of solid deals that have strengthened our current investments portfolio and boosted our market reputation for attractive and innovative investment offerings. The Bank is also on target to achieve further improvements in revenue growth and reduced operating costs in line with the Bank’s strategy that focuses on generating and sustaining profitability, maintaining adequate liquidity and building a solid foundation for providing acceptable returns to our shareholders.
These positive results are testimony to the Bank’s high standards of corporate governance 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, added.