MANAMA: Bahrain based leading Islamic banking group, Al Baraka Banking Group B.S.C (ABG), defied the adverse developments in the region by reporting a net profit of $69 million for the first quarter of 2015, an increase of 3% over the net profit of the same period of last year.
“While balance sheets items were affected by the devaluation of exchanges rates of currencies of the countries where ABG’s units work, where total assets decreased by 1%, total financing and investments remained almost the same as end of December 2014, and customer accounts decreased by 2% at the end of March 2015 compared to the end December 2014,” the Group in a statement said.
“These results reflect the Group’s success in maintaining a steady growth, thanks to large diversification in income sources from different core businesses, where the income from these sources witnessed remarkable growth during the first quarter of 2015, despite the effects of currencies devaluation.”
“The political and economic tensions continued during the first quarter of 2015 in a number of countries where our units operate, which was coincided with continued decline in oil prices on one side and the continued efforts to enhance recovery and growth prospects in developed countries amid fluctuated monetary and financial conditions and regulatory developments on the other hand,” Sheikh Saleh Abdullah Kamel, Chairman of Al Baraka Banking Group, in a statement said.
“All these had impacts on banking environment and it was natural that banks adopted more cautious business strategies. But we nevertheless note with satisfaction that ABG continued to achieve good results, which reflects the Group success in following the sound Islamic banking model and precautionary business strategies that enabled it to deal wisely with these developments and to continue expanding its business. ”
“The financial and operational results achieved during the first quarter of 2015 reflect the keenness of the Group to grow steadily and efficiently, despite growing regional and global challenges around us, and growing regulatory, technical and human requirements,” Abdulla Ammar Al Saudi, Deputy Chairman of ABG, said.
“We were able to keep pace with all these challenges and requirements, committed to the highest professional and ethical values and principles, and thanks to implementation of wise strategies and programs supported by strong financial means, human resources and technical capabilities possessed by the Group and the long experience of its units in the market where they operate,” he added.
According to the financial statements of the Group, total operating profit amounted to US$ 238 million in the first quarter of 2015, which is markedly higher by 12% compared to the first quarter of 2014. After deducting all operating expenses which increased by 6%, the net operating income for the first quarter of 2015 amounted to US$ 101 million, increasing remarkably by 20% compared to the first quarter of 2014. This reflects the noticeable increases in income from core businesses and the success of the Group to diversify its income from fees, commissions and banking services. After deducting taxes and provisions, the net income of the Group reached US$ 69 million for the first quarter 2015, up by 3% compared to the first quarter of 2014 of US$ 67 million. The net income attributable to equity holders of the parent reached US$ 40 million, representing an increase of 9% compared to the same period last year.
Due to the noticeable fluctuations in exchange rates in some of main markets where we operate, the growth rate of the balance sheet items were affected, and therefore the total assets of the Group decreased by 1% to reach US$ 23.1 billion as at the end of March 2015. Without calculating for these effects, the total assets would increase by 6% to US$ 24.8 million compared to the end of 2014. The operating assets (financing and investments) amounted to US$ 17.7 billion as at the end of March 2015 compared to US$ 17.6 billion at the end of December 2014. Customer accounts decreased by 2% from US$ 19.9 billion as at the end of December 2014 to US$ 19.4 billion as at the end of March 2015. Total shareholders’ equity amounted to US$ around 2 billion as at the end of March 2015.