MANAMA: Bahrain-based Securities & Investment Company (SICO), net profit for the first half of 2014 increased by 166% to BD 5.1 million (H1 2013: BD 1.9 million). The bank said its operating income grew by 87% to BD 8.2 million (H1 2013: BD 4.4 million) while basic earnings per share rose from Bahraini fils 4.5 to 11.8 fils.
SICO which is licensed by the Central Bank of Bahrain as a conventional wholesale bank announced on Saturday its financial results for the second quarter of 2014 and the first six months of the year.
For the second quarter of 2014, net profit increased to BD 2.5 million (Q2 2013: BD 901000); while operating income rose by 86% to BD 4.0 million (Q2 2013: BD 2.2 million). Basic earnings per share rose from Bahraini fils 2.1 for Q2 2013 to 5.8 fils for Q2 2014.
Interest income, net fee and commission income, and brokerage and other income during the second quarter of 2014 contributed to operating income by BD 327000, BD 1.6 million and BD 829000, respectively; while net investment income contributed BD 1.3 million. Total operating expenses for the period were BD 1.4 million.
Year to date, brokerage and other income has increased by 129% to BD 1.6 million (H1 2013: BD 685 thousand). Investment income grew by 94% to BD 3.7 million (H1 2013: BD 1.9 million), and net fee & commission income increased by 108% to BD 2.3 million (H1 2013: BD 1.1 million); while interest income declined slightly to BD 657 thousand from BD702 thousand reported for same period last year.
For the first six months of 2014, total operating expenses, which include staff overheads, Interest Expense and general administration & other expenses, rose moderately to BD 2.9 million, compared with BD 2.4 million for the corresponding period in 2013.
As at 30 June 2014, total balance sheet footings had decreased slightly to BD 93.3 million from BD 94.2 million at the end of 2013. Assets under management grew by 13.6% to BD 360 million (US$ 955 million) from BD 317 million (US$ 840 million) at the end of the previous year, while assets under custody with the Bank’s wholly-owned subsidiary – SICO Funds Services Company (SFS) – grew by 31% from BD 1.3 billion (US$ 3.4 billion) to BD1.7 billion (US$ 4.5 billion).
“Despite the GCC equities sell-off during June amid worries about speculative bubbles and the overheated property sector in Dubai, net profit for the first six months rose by 166% to BD 5.1 million (H12013: BD1.9million), which equals the net profit reported for the whole of 2013. All core business areas generated strong revenues, with fee-based income revenue reaching BD 3.9 million, which is the highest quarterly fee-based revenue achieved since 2007,” Najla M. Al Shirawi, Chief Executive Officer of Securities and Investment Company, added.
“Total assets under management increased to a record US$ 955 million, surpassing the highs recorded before the financial crisis of 2008 by 57%.”
The bank continued to maintain a strong capital base, ending the first six months of the year with increased shareholders’ equity of BD 62.9 million. The balance sheet remains highly liquid, with a very strong consolidated capital adequacy ratio of 70.55 per cent. The available-for-sale securities portfolio at the end of June 2014 decreased in size to BD 31.1million from BD 32.7 million at the end of 2013. Similarly, investments at fair value through profit or loss decreased to BD 15.9 million from BD 19.8 million at the end of the previous year, as part of the Bank’s tactical asset allocation.
“We are pleased with the continuation of our strong results, which demonstrates the capability of the SICO team to create value for shareholders and clients by capitalizing on opportunities arising from market recovery and higher prospects for the economy. We have enjoyed bullish rallies in both Equities and Fixed Income in the first half of the year, however we do not expect the stock markets’ exceptionally strong performance during the first six months of the year to be repeated in the second half of 2014. We also expect the positive momentum in fixed income to slow down or stay range bound for the rest of the year, as concerns about the pace of global economic growth that drove investors to safe-haven assets in the first quarter of 2014, subside during the second half of 2014,” Al Shirawi said.
“Nevertheless, our different business lines give SICO significant room for additional revenues, with a healthy pipeline of mandates and transactions in the areas of asset management, brokerage and corporate finance. We have a positive outlook for the rest of the year, barring of course, any unforeseen events. At the same time, we continue to remain focused on prudently managing our capital and cost structure,” she added.