MANAMA: The shareholders of the Bank ABC have approved the payment of cash dividend of $92.93million for the year 2018.
Dr Khalid Kawan, Group CEO Bank ABC told a Press conference held at the Bank’s Headquarters that the shareholders during the Annual General Meeting (AGM) gave a nod for a cash dividend distribution of 3% (US$0.03 per share, net of treasury shares), equal to US$92.9million and translating to approximately 46% of the net profit for the year, attributable to the shareholders of the parent.
Bank ABC is well positioned to seek the enhancement of market share for its shareholders in 2019 despite challenging business climate in the wake of recent US Fed decision and looming fallout of the UK Brexit, adds Dr Khalid Kawan.
Dr Khalid, who was joined by Sael Al Waary Deputy Group CE and Brendon Hopking Group CFO, said that the bank has remained consistent in achieving the objectives of its three-year strategy (2015-2018) and the bank’s future strategy will serve as main pillar of sustainability and growth over the period of next three years (2019-2022).
During the AGM the shareholders also approved the appointment of new directors to replace retiring board members for a period of next three years.
Earlier, the ABC Bank had announced the profitability of $202 million that was year on year five per cent a head of last year and while we had been able to increase the profitability within a rate which is consistent with the historic performance of the bank over the past three years.
“We have been able to preserve capital adequacy of the bank as bank’s tier one capital ratio is 17. 2 which is almost flat against the last year probably the comparison that needs to be done and assets remained steady at around $24 billion,” Dr Khalid said, adding that since announcement of the intention for a market making arrangement in February 2018, ABC’s share price had risen from $0.28 to $0.44 (as a 31 January 2019), a rise of 50% with over 30% of that gain following announcement of the arrangement on 20 June 2018.
“The volume of ABC’s share traded in the 12 months period to 31 December 2018 has increased to 54.2 million (+53%) from 35.5 million in similar period 2017. Operating performance continued its positive trend during the year 2018, and the first phase of our transformation strategy has met its goals. This was achieved despite slowing global economic growth and persisting geopolitical tensions. In our core markets, recovery in the GCC remains muted and the outlook in North Africa continues to be challenging. But conditions in Brazil, another key market for us, are improving,” he said.
Brendon Hopking Group CFO, said the impact of the value added tax (VAT) would remain very minimal and it would not impact the balance sheet.
Talking about the Group strategy, Dr Khalid said that expansion of footprint will remain a hallmark of the strategy and opening of Dubai and Singapore offices have yielded positive results. “Bank’s other strategic initiatives, operating costs were US$ 474 million, US$12 million higher than in 2017. Impairment charges for the year were US$79 million, down from US$96 million in 2017, reflecting prudent lending criteria and proactive management of remedial, which helped us contain our credit cost,” he explained.
In regard to our wholesale bank strategy, Dr Khalid said, the business at a global level shall be focusing on improving corporate and financial institutional client relationships by leveraging our network and capabilities to become a more effective partner, using multiple products across several countries on an ongoing basis.
Sael Al Warry, replying to a question of fintech and the digital strategy, he said it served as a major strategic initiative and the development of a mobile-first retail bank, which is planned to go live in Bahrain before the end of 2019. “The Central Bank of Bahrain has approved the new bank and granted it a license. After launch in Bahrain, the intention is to expand into other MENA markets, such as Egypt and Jordan.”
The Bank’s balance sheet remains strong, resilient and increasingly well-diversified. The Basel III capital adequacy ratio and Tier 1 ratio at the year-end stood at 18.2% and 17.2% respectively, which is higher than those of many of our peers. The underlying investment portfolio is stable and liquid, continuing to become more geographically diverse. Customer deposits were US$ 16.4 billion at the year-end, compared with US$16.8 billion in 2017, and loans and advances were US$ 14.9 billion, against US$15.3 billion in 2017.
Reflecting the quality of our strategy and management, and the strength and resilience of the Bank’s balance sheet and asset quality, Standard & Poor’s and Fitch Ratings both reaffirmed Bank ABC’s credit rating at BBB-, notwithstanding ratings pressure in a number of our key geographies. Fitch noted that the investment grade rating reflects the Bank’s geographical diversification, competent management, appropriate responses to risks, capitalisation above peers, sound liquidity and stable funding.