MANAMA: The Bahrain based leading Islamic banking group, Al Baraka Banking Group (ABG), has maintained sustained profitability trends across its global operations despite challenging economic climate in many markets, according to a top executive.
“The international and regional developments and conditions continued in the first quarter of 2016, which formed serious challenges for us, including the slowdown of economic activities due to the decline in oil prices and government tax measures in some countries, in addition to decline of currencies value of some of our units’ countries against the US dollar, the currency of the Group’s consolidated reports. But despite all these developments, we were able not only to maintain our strong profits and operational positions, but also to enhance our precautionary measures in the context of sound policies and strategies developed by the Group and are implemented by all units. We are very pleased to see the contribution of all our banking units in the positive results of the Group,” said, Mr. Adnan Ahmed Yousif, Member of the Board of Directors and President and Chief Executive of ABG.
Total operating income reached US$ 276 million in the first quarter of 2016 compared to US$ 238 million during the same period of 2015, an increase of 16%. Net operating income increased by 13% from US$ 101 million to US$ 114 million during the same period, despite the large increase of 18% in operating expenses due to expansion in branch network.
After deducting taxes, which rose compared with last year due to some recoveries relating to past periods which were not repeated this year, as well as provisions due to the precautionary measures taken due to general economic conditions, the Group was able to achieve a net income attributable to equity holders of the parent of US$ 38 million which was lower than the profit achieved during the first quarter of 2015 amounting of US$ 40 million by 5%. Moreover, the Group was able to achieve a total net income of US$ 69 million, the same level of total net income achieved during the first quarter of 2015. The profits growth rate was affected also by the decline in economic activity in some countries in which the Group operates as a result of lower oil prices, as well as the appreciation of the dollar value against their currencies.
The total assets of the Group as at the end of March 2016 maintained its same level of December 2015 and reached US$ 24.5 billion. The Group maintained a large portion of these assets in the form of liquid assets in order to seize the financing opportunities and to face the fluctuations in the markets, as liquidity ratio (liquid assets to total assets ratio) reached 23% at the end of March 2016.
Operating assets (financing and investments) amounted to US$ 18.6 billion as at the end of March 2016 compared to US$ 18.4 billion at the end of December 2015, an increase of 2%. As a clear indication of the high quality of the assets, the non-performing financings / total financings ratio reached 3.2%.
With regard to the Group’s plans to expand its branch network he said that the Group had opened 20 new branches in the first quarter of 2016 bringing total branches to 607 and staff of 11,458 at the end of December 2015. This reflects the clear role of our units in creating rewarding jobs to citizens in their communities. In addition, this policy is one of main pillars of growth in businesses and profits in the Group. ”
“In terms of Arabic and international geographical expansion, and after obtaining the official approval to establish a banking unit in Morocco, we are working now to complete the establishment procedures, and we hope to launch it soon. The entry of the Group to Morocco market is considered a very important achievement, because it represents one of the main markets in the Arab Maghreb and Africa, and will achieve a higher diversification in assets and income sources for the Group.
