Bahrain-based Securities & Investment Company (SICO) reported a net profit of BD1.351 million for the first quarter of 2012 compared to a loss of BD 627,000 for the same period of the previous year.
Net interest income during the first quarter of 2012 increased to BD309000, while fee and commission income declined to BD548000. Brokerage and other income fell to BD168000. Net Investment income stood at BD1.527 million versus a loss of BD654000 in the first quarter of 2011.
Thus operating income significantly increased to BD2.552 million, with earnings per share growing to 3.17 Bahrain fils, versus a loss per share of 1.5 Bahraini fils for the same period the previous year.
Client fee generated Income represented 28 per cent of the operating income for the year. Assets under management increased by 7.8 percent reaching BD222 million compared to BD206 million at the end of December 2011, with most of the increase due to organic growth in assets under management. Concurrently assets under custody for the Bank’s custody and administration wholly owned subsidiary – SICO Funds Services Company (SFS) – increased by 3.6 percent reaching BD895 million, compared to BD864 million at the end of December 2011.
Total expenses, which includes, both staff overheads and general administration and other expenses grew in the first quarter of 2012 to reach BD1.134 million from BD1.086 million the same period the previous year. Impairment on available for sale investments were BD67000 for the first quarter of 2012.
As a result of the Bank taking a more positive view of the market environment, the balance sheet was re-leveraged during the past three months, so by the end of the first quarter total assets increased to BD99.7million from year-end 2011 when total assets reached BD 70.6 million, while total liabilities increased to BD43.1 million from BD16.7 million at the end of December 31st, 2011.
SICO maintained a strong capital base ending the quarter with BD56.5 million in shareholder equity compared to BD53.9 million as of 31st, December 2011.
SICO’s outlook continues to be prudent, and its strategy remains focused on maintaining a strong balance sheet, in order to take advantage of opportunities and capitalise on a further market recovery, expected to continue in 2012 – but also taking into account any possible turbulence that the capital markets may face going into the year.
“While the environment for the Bank’s investments was more settled, some of the business lines did not see a sufficient recovery for the quarter, although we also started to observe a noticeable turnaround in brokerage and asset management activities which we believe will contribute to the rest of the year’s revenue flow,” Anthony Mallis, Securities & Investment Company’s CEO, said.
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“Despite the fact that SICO has an expansionary posture in terms of our businesses, we have maintained a prudent position in our risk appetite as we monitor the regional and global economic environment. Although the overall economic environment was more benevolent than the previous and final quarter of last year, market volatility was still high. As we have mentioned before, it is our view that very substantial economic challenges, with turbulence and uncertainty, will continue for the foreseeable period and therefore the Bank has maintained a realistically cautious position during the first quarter of 2012”, he added.