ABC nine-month profit surges 40pc
Manama, October 18, 2011
Bahrain-based Arab Banking Corporation (ABC) said its consolidated group net profit for the first nine months rose to $157 million, up 40 per cent over the same period last year.
Announcing the results on Tuesday, ABC said the total operating income for the third quarter amounted to $200 million, marginally below $207 million in the previous quarter, whilst operating expenses decreased to $97 million compared to $102 million, in part due to the impact of exchange rates.
The bank's cost/income ratio improved to 48.5 per cent from 49.3 per cent. Operating profit before impairment provisions reached $103 million. Net impairment provision charge of $20 million was taken during the quarter.
However the ABC net profit for the third quarter fell to $41 million from $68 million in the previous quarter.
This was due to net impairment provision charge of $20 million compared to net recovery of $8 million during the previous quarter, the bank said.
Shareholders’ equity at September 30, 2011 stood at $3.56 billion compared to $3.59 billion at the end of the second quarter, it added
The decrease occurred mainly due to exchange translation on foreign subsidiaries following the sharp rise of the US dollar in September.
Commenting on the results, ABC president and chief executive Hassan Juma said, 'These highly creditable results have been delivered despite the very challenging business environment that has prevailed throughout the year.'
'ABC has continued to prudently reduce its exposure to market risk, maintain a very liquid position and to implement strict credit and liquidity guidelines but yet still has delivered strong year on year revenue growth for the nine months ended September 30,' he noted.
'Brazil has continued to be a major engine of revenue growth and I am particularly pleased that revenues from subsidiaries in Mena are up year on year despite the well-known difficulties in two of our markets. Expenses remain well controlled and our cost/income ratio continues to improve,' Juma added
According to Juma, ABC’s capital base remained very strong with a capital adequacy ratio of 23.9 per cent, predominantly Tier 1, which totalled 19.1 per cent.
He pointed out that the banking group's liquidity was at a comfortable level with the liquid assets to deposits ratio at 69 per cent, compared with 73 per cent at the end of the previous quarter.
ABC chairman Mohammed Layas said, 'Looking ahead to when our markets return to normal, ABC is well placed in terms of capital, liquidity, geographic presence and products to take advantage of the trade and business flows that will arise from the recovery.'
'Our geographic diversification remains a major strength as is the strong support of our major shareholders. We look forward to continued sustainable growth as our transformation into a leading Universal Bank continues,' he added.-TradeArabia News Service