Manama: Securities & investment Company (SICO), licensed by the Central Bank of Bahrain (CBB) as a conventional wholesale bank, reported net profit for the first quarter of 2017 increased to BD 1.32 million compared with BD 30000 for the corresponding period in 2016.
With higher revenues being generated by all business lines, operating income grew by 121 per cent to BD 2.90 million from BD 1.31 million a year earlier. Total operating expenses, which include staff overheads, general administration and other expenses, increased marginally to BD 1.39 million from BD 1.37 million. Earnings per share were Bahraini fils 3.07 compared with 0.07 fils for the first three months of 2016.
“SICO achieved an overall encouraging financial performance for the first quarter of the year, despite mixed performance across markets and variable liquidity conditions. Significantly, all business lines revenues posted positive growth, and increased their respective contributions to the bottom line,” Commenting on these results, Chairman of the Board, Shaikh Abdulla bin Khalifa Al Khalifa, said.
“The Bank reinforced its leading position in Asset Management with AUM continuing to grow quarter on quarter, reflecting clients’ enduring trust in SICO’s ability to outperform in different and complex markets. Brokerage and Investment Banking maintained their local market dominance, completing significant transactions in the first quarter, and winning new mandates which we expect to close later in the year.”
The results reflect a significant increase in net investment income, which closed the period at BD 1.22 million compared with a loss of BD 68 thousand a year earlier. All other income lines also posted income growth: brokerage and other income BD 583000 (1Q16: BD519000), net fee and commission income BD 676000 (1Q16: BD 604000), and net interest income BD 269000 (1Q16: BD 215000).
As at 31 March 2017, total balance sheet footings stood at BD 141.94 million compared with BD 147.06 million at the end of 2016. Assets under management increased to BD 419.35 million (US$ 1.11 billion) from BD 395.90 million (US$ 1.05 billion) at the end of the previous year. Assets under custody with the Bank’s wholly-owned subsidiary – SICO Funds Services Company (SFS) – grew to BD 2.06 billion (US$ 5.47billion) from BD 1.95 billion (US$ 5.17billion at the end of 2016.
SICO continued to maintain a strong capital base, ending the period with shareholders’ equity of BD 57.34 million (end-2016: BD 58.08 million), net of BD 2.14 million dividends for FY2016 distributed during the first quarter of 2017; and a very strong consolidated capital adequacy ratio of 57.93 per cent.
“The majority of GCC markets posted a muted performance during the period, due mainly to weak quarter four 2016 earnings, with the S&P GCC Composite Index (total return) increasing 0.9 per cent. Kuwait and Bahrain were the exception, with gains of 22.3 and 11.1 per cent respectively, led by higher turnover and investor interest,” Najla Al Shirawi, Chief Executive Officer, said.
“SICO’s business lines enjoyed an active first quarter. Highlights include Corporate Finance acting as Financial Advisor for the mandatory offer by Bahrain Kuwait Insurance Company for Takaful International Company; and also as Escrow Agent for the mandatory offer by AN Investments for all outstanding shares of Bahrain Middle East Bank. Asset Management maintained its robust growth trend, with total AUM increasing by 6 percent to over US$ 1.1 billion, with all SICO funds performing strongly against their respective benchmarks and peers. In addition, Fixed Income reported record trading revenues, and expanded its structured products portfolio. Notably, the Bahrain Liquidity Fund, for which SICO is the Fund Manager, continued to meet its objectives of increasing the liquidity and depth of the Bahrain Bourse; as the average traded value tripled during the first quarter of 2017, with the Fund contribution reaching 45 per cent of the overall traded value,” Al Shirawi added.
