The bank also announced net profit for the second quarter of $68 million compared to $48 million in the first quarter, thanks to increased revenues and reduced net impairment provisions.
Total operating income for the second quarter reached $207 million, five per cent up from $197 million in the first quarter. Group operating expenses increased marginally to $102 million compared to $99 million in the previous quarter, in part due to the impact of exchange rates. However, the cost/income ratio improved to 49% from 50%. Operating profit before impairment provisions registered a 7% increase to reach $105 million. Net Impairment provisions resulted in a recovery of $8 million for the quarter as recoveries exceeded new reserves created in the quarter.
Shareholders’ equity at 30 June 2011 stood at $3.599 billion, compared to $3.486 billion at the end of the first quarter, the increase during the quarter coming from improvement in fair values of non-trading securities, exchange translation gains on foreign subsidiaries as well as the net profit for the period. ABC’s capital base remains very strong with a capital adequacy ratio of 23.0%, predominantly Tier 1, which totalled 18.7%. ABC’s liquidity remains comfortable with the liquid assets to deposits ratio at 73%, compared with 71% at the end of the previous quarter.
“I am pleased to announce these excellent results, which represent our tenth consecutive profitable quarter. These results reflect steady and sustained improvements in our financial strength, profitability and efficiency, despite recent events in MENA, the situation in Libya and a challenging economic environment in the US and Europe,” Hassan Juma, President and Chief Executive of ABC, said.
“We take satisfaction that our rating agencies have recently commended ABC on such achievements, citing in particular our extremely robust capital base and large reserves of liquidity, which these results serve to confirm,” Juma added.
“We are confident that the markets recognise that when conditions return to normal in MENA, ABC is uniquely well placed to benefit from the increased levels of trade flows and other business that will result out of such normality. Likewise, ABC will continue to benefit from the strong support of its major shareholders as its transformation into a leading Universal Bank takes shape.”