ABC profit jumps 55pc to $116m in H1
Manama, July 17, 2011
Arab Banking Corporation today announced that its consolidated group net profit for the first half-year of 2011 increased 55 per cent to $116 million, compared to the same period last year.
Net profit for the second quarter was $68 million compared to $48 million in the first quarter, due to increased revenues and reduced net impairment provisions, the bank said.
Total operating income for the second quarter amounted to $207 million, 5 per cent above $197 million in the first quarter.
Group operating expenses increased marginally to $102 million compared to $99 million in the previous quarter, in part due to the impact of exchange rates. However, the cost/income ratio improved to 49 per cent from 50 per cent. Operating profit before impairment provisions registered a 7 per cent increase to reach $105 million. Net Impairment provisions resulted in a recovery of $8 million for the quarter as recoveries exceeded new reserves created in the quarter.
Shareholders’ equity at June 30, 2011 stood at $3.599 billion, compared to $3.486 billion at the end of the first quarter, the increase during the quarter coming from improvement in fair values of non-trading securities, exchange translation gains on foreign subsidiaries as well as the net profit for the period, it said.
ABC’s capital base remains very strong with a capital adequacy ratio of 23.0 per cent, predominantly Tier 1, which totalled 18.7 per cent. ABC’s liquidity remains comfortable with the liquid assets to deposits ratio at 73 per cent, compared with 71 per cent at the end of the previous quarter, the group said.
Hassan Juma, president and chief executive of ABC, said: “I am pleased to announce these excellent results, which represent our tenth consecutive profitable quarter. These results reflect steady and sustained improvements in our financial strength, profitability and efficiency, despite recent events in Mena, the situation in Libya and a challenging economic environment in the US and Europe. We take satisfaction that our rating agencies have recently commended ABC on such achievements, citing in particular our extremely robust capital base and large reserves of liquidity, which these results serve to confirm.
“We are confident that the markets recognise that when conditions return to normal in Mena, ABC is uniquely well placed to benefit from the increased levels of trade flows and other business that will result out of such normality. Likewise, ABC will continue to benefit from the strong support of its major shareholders as its transformation into a leading Universal Bank takes shape.” – TradeArabia News Service