Venture Capital Q1 net profit $8m
Manama, May 15, 2012
Bahrain-based regional Islamic investment bank, Venture Capital Bank (VCBank), has reported a net profit of $8 million for the quarter ended March 31, 2012, compared with a loss of $2.9 million for the corresponding period in 2011.
The bank reported a total income of $11.1 million.
Total revenues increased seven-fold to $11.1 million, with income from investment banking activities rising significantly to $10.4 million, compared with $1.45 million and $854,000 respectively for the corresponding period in 2011.
Total expenses reduced slightly to $3.3 million from $3.8 million for the corresponding period in the previous year. Total assets stood at $212.2 million on March 31, up from $198.5 million at the end of 2011, while shareholders’ equity grew 4.5 per cent to $187.8 million from $179.7 million at year-end 2011.
Dr Ghassan Al Sulaiman, chairman of VCBank, said: “These excellent results, despite continued challenging market conditions, confirm the validity of our Mena-focused strategy and differentiated venture capital and private equity-based business model.”
“Such a promising start to the new year bodes well for the bank’s prospects for the rest of 2012 and our commitment to provide shareholders and investors with acceptable rates of return.”
“Strongly capitalised at $250 million, with liquid assets of $14 million, and currently unleveraged, VCBank is a financially strong and solid institution,” he said. “At the end of March 2012, our capital adequacy ratio was 39.6 per cent, considerably higher than the minimum requirement of the Central Bank of Bahrain, while assets under management had risen by 12 per cent to $834 million compared to $745 million as at March 31, 2011.”
The bank also announced its new elected board of directors which was confirmed by shareholders at its recently held annual general meeting.
Abdullatif Mohamed Janahi, board member and CEO, VCBank, said: “Our results underline the success of our strategic focus on key sectors in which we have built particular expertise, such as healthcare, agribusiness, oil and gas, and shipping; and on more economically and politically stable markets in the Mena region.”
Based on its investment track record, and relationships developed with its investor base, the bank was able to arrange and place two significant deals.
Shipco, a $33.5 million shipping capital lease project, which entails a capital lease through sale and leaseback on a bareboat basis of three one-year-old Supramax 57,000 dwt bulk carriers.
The lessee is an international provider of marine transportation services, currently operating its own fleet of seven Supramax vessels. It is also the world’s largest transporter of rice.
The second deal is valued at $93.7 million, the bank took an indirect investment in 65 per cent of the equity of Göknur Foods Import Export Trading & Distribution Company in Turkey.
Göknur is one of the largest fruit juice concentrate and fruit puree producer and exporter in Turkey, with a 50 per cent market share.
“Underlying the successful placement of these deals is our experience in the regional agribusiness and shipping sectors, marked by key investments such as Jordan Al Abyad Fertilizers & Chemicals Company (Jafcco), and Lemissoler Maritime Company,” Janahi said.
Bahrain’s economy is expected to grow by 3.6 per cent in 2012, driven by high oil prices and a recovery in the Kingdom’s tourism and financial sectors, according to the IMF.
“Given these factors, and our strong financial performance during the first quarter of the year, we remain cautiously optimistic for the bank’s prospects in 2012,” Janahi concluded. – TradeArabia News Service