Manama: Bahrain-based Arab Banking Corporation (ABC) announced that its consolidated Group net profit for the first nine months of 2014 was $197 million, an increase of 11% over the$178 million for the same period last year. Net profit for the third quarter was $60 million, 9% lower than the $66 million reported in the third quarter last year.
Total operating income for the third quarter amounted to $208 million, the same level as in the previous year whilst operating expenses increased by 9% to $108 million, compared to $99 million last year, mainly due to compensation and new hires. Cost to income ratio for the nine months saw an improvement to 47.9% from 50.4% due to revenue growth during 2014.
Net impairment provisions for the third quarter of $13 million was higher than $6 million in the same period last year; however, the cumulative net charge for the nine months at $40 million was lower than $44 million for the same period last year. The ratio of non-performing loans (NPLs) to gross loans improved to 2.5% from 3.0% at 2013 year-end.
ABC Group’s total assets registered a growth of 9% during 2014 to stand at $28.9 billion as of 30 September 2014, reflecting growth in loan volumes and liquid assets. The Group has maintained a diverse and primarily short term asset book with 60% of assets having a tenor of less than one year.
Deposits grew by7% during the year to $19.6 billion from $18.3 billion at 2013 year-end. New borrowings of $0.9billion during the quarter resulted in term borrowings to reach $3.7billion, $2.8billion at 2013 year-end.
The Group’s liquidity position continues to be strong with the liquid assets to deposits ratio at 65% (63% at 2013 year-end). The liquid assets to total assets ratio stood at 44%, which is the same as at 2013 year-end.
Shareholders’ equity stood at US$3,976 million on 30 September 2014, compared toUS$3,940 million at 2013 year-end. ABC’s capital base remains very strong, with a capital adequacy ratio of 21.7%, predominantly Tier 1, which totalled 17.9%. Adjusted to a Basel III basis, in line with the Central Bank of Bahrain rules, the Group’s total capital adequacy ratio is 21.2%, and its Tier 1 ratio is 17.9%.
“We are satisfied with our third quarter results where all business units contributed to this achievement. ABC continues to diversify and extend tenors to further strengthen its funding profile. The recent $750 million of 3-year borrowing at pricing that compares favourably to higher rated peers attracted leading banks across a wide geographic spectrum from Europe, North America, Asia and the Middle East. With substantial capital resources and deeper investment into our talent base, ABC is poised for more growth in the years ahead,” ABC’s Chairman, Saddek El Kaber, said.
ABC is a leading international bank in the MENA region and provides innovative wholesale financial products and services that include corporate banking, trade finance, project and structured finance, syndications, treasury products and Islamic banking. It also provides retail banking services through its network of retail banks in the region.