Manama: Bahrain-based Securities & Investment Company (SICO) net profit up 110 % to BD 6.85 million at end of nine months, compared with BD 3.26 million for the corresponding period in 2013.
SICO’s operating income grew by 64% to BD 11.73 million from BD 7.15 million for the first nine months of the previous year. Basic earnings per share rose by 107.6% to Bahraini fils15.84 from 7.63 fils for the similar period last year.
SICO is licensed by the Central Bank of Bahrain as a conventional wholesale bank, announced today its financial results for the 3rd quarter of 2014 and for the first nine months of the year.
For the third quarter of 2014, net profit grew by 30% to BD 1.77 million, compared with BD 1.36 million for the same period in the previous year; while operating income rose by 27% to BD 3.48 million from BD 2.73 million for the third quarter of 2013. Basic earnings per share increased by 30% to Bahraini fils 4.14 from 3.18 fils for the corresponding quarter of 2013.
The third quarter of 2014 witnessed strong contributions by net interest income, net fee and commission income, and brokerage and other income of BD 369 thousand, BD 826000 and BD 443000 respectively to operating income; while the contribution of net investment income also increased to BD 1.84 million. Total operating expenses for the three-month period rose moderately to BD 1.7million.
Year to date, brokerage and other income increased by 120% to BD 2.01 million, along with net investment income which grew by 66% to BD 5.55 million.
Net fee and commission income improved by 70% to BD3.14 million while net interest income remained largely unchanged at BD 1.02 million. For the first nine months of 2014, total operating expenses, which include staff overheads, general administration and other expenses rose to BD 4.9 million, compared with BD 3.9 million for the same period in 2013.
As at 30 September 2014, total balance sheet footings had increased by 23% to BD 115.80 million from BD 94.19 million at the end of 2013. Discretionary assets under management grew by 23% to BD 389.04 million (US$ 1.03 billion) from BD 316.91 million (US$840.6 million) at end-2013, reflecting the continued strong performance by SICO’s asset management business and clients’ confidence in SICO’s prudent investment strategy. Assets under custody with the Bank’s wholly-owned subsidiary – SICO Funds Services Company (SFS) – grew by 41% to BD1.77 billion (US$ 4.7billion) from BD 1.26 billion (US$3.34billion) at the end of 2013.
“I am delighted to report that SICO has continued to produce excellent financial performance despite ongoing market volatility, with substantial increases in operating income and net profit. One notable achievement that should be highlighted is that total discretionary assets under management passed US$ 1 billion during the quarter on the back of SICO’s ability to win new client mandates,” Shaikh Abdulla bin Khalifa Al-Khalifa, Chairman of Securities & Investment Company, said.
“The board has full confidence in the ability of our high-calibre management team to capture attractive new business opportunities and address all future challenges,” Shaikh Abdulla added.
The Chairman also announced changes to the Board of Directors. He thanked outgoing director Meshari Al-Judaimi (representing the Gulf Investment Corporation) for his valuable contribution since 2009; and in turn welcomed his replacement, Waleed Al-Braikan, who brings with him extensive experience in international and regional investment banking.
“Of particular significance is the 87% increase in fee-based income, which now contributes 44% to total income compared with 38% a year ago. Balanced and diversified revenue generators will enable SICO to better withstand continued market volatility. The Bank’s proprietary book also continued to perform well, with a 66% growth in net investment income. This is due to our tactical asset allocation and disciplined risk management approach.”
SICO continued to maintain a strong capital base, ending the first nine months of the year with shareholders’ equity of BD 64.9 million, and a very strong consolidated capital adequacy ratio of 62.77%. The Bank continued its prudent posture with regard to the domestic and international capital markets. Available-for-sale securities at the end of September 2014totalled BD 32.82 million (end-2013: BD 32.74 million), while investments at fair value through profit or loss were BD 17.05 million (end-2013: BD 19.81 million).
“Looking ahead, from now to the year end, we expect volatility levels to be elevated on the back of a long bull run in equities, which stretched earnings multiples to record levels while most markets are going through moderating earnings growth. Nevertheless, we still relatively prefer equities over fixed income. We believe that in the fourth quarter uncertainty will dominate financial markets, with the ending of the Fed’s QE program and the tightening schedule being data driven. From our perspective in the region, the stability of oil prices is a key factor for the markets to settle and to be re-evaluated in light of the new oil prices range,” Al Shirawi, added.