The announcement by Ithmaar Bank Chairman His Royal Highness Prince Amr Mohamed Al Faisal followed the review and approval, by the Board of Directors, of the Bank’s consolidated financial results for the three month period ended 31 March 2012.
“On behalf of the Ithmaar Bank Board of Directors, I am pleased to announce that Ithmaar Bank’s net operating income of $4.4 million before impairment provisions and taxation represents a turnaround of 257 percent in the first three months of the year,” said HRH Prince Amr. “The Bank, however, continues to take prudent impairment provisions and, as a result, reported a net loss of $0.5million, after provisions for the first quarter of 2012, compared to a net profit of $4.8million in the same period last year and that the results for the first quarter of 2012 outperformed the Budget. A substantial part of the provision charge of $4.6million during the first quarter is attributable to general provisions,” he said.
“The financial results indicate that most of the income streams from Ithmaar’s core retail and commercial banking activities continue to grow steadily,” said HRH Prince Amr. “Total income, for example, has increased from $109.2million to $120.8million in the first quarter, an increase of about 11 percent. This increase in total income is despite decline in income from Murabaha and other financings and is mainly due to reduced profit rate charged by a subsidiary which is in line with the reduced benchmark rate. It is encouraging to note that the expense control initiatives are yielding results and operating expenses have declined from $52.8million to $48.6million, a savings of about 8 percent. In the first quarter, Ithmaar continued to build up impairment provisions and has allocated $3 million as a general impairment charge,” he said.
Ithmaar Bank Chief Executive Officer and Member of the Board, Mohammed Bucheerei said that the Bank’s core business continued to grow in the first quarter.
“Customer current accounts and unrestricted investment accounts and due to investors have increased to $4.35billion, during the first quarter. Equity of unrestricted investment accounts increased by $115million to $1.6billion, an increase of about 8 percent,” said Bucheerei. “In the same period, the results show that corresponding increases were also achieved in Morabaha and other financing products which have increased by around $250million to about $3billion, an increase of about 9 percent,” he said.
“Meanwhile, shareholder equity continues to remain strong, and has increased in the first quarter of 2012 by $17.5million to about $594.4million, mainly due to improved investment valuations and balance sheet remains stable at $7.2billion” said Bucheerei.