Bank of Sharjah net profit up 9pc
Sharjah, February 3, 2013
UAE-based Bank of Sharjah has registered a net profit of Dh277 million ($77.4 million) for the year ending December 31, 2012, up nine per cent over Dh254 million the previous year.
Announcing the results, the Sharjah lender said its total assets increased by 9 per cent to hit Dh22.8 billion compared to Dh20.9 billion.
The bank continued to grow its deposit base which reached Dh16.4 billion as of December 31, 2012, 10 per cent over Dh14.9 billion the previous year. Its total assets rose 10 per cent during the year mainly due to an surge in customer deposits.
As a result, earnings per share for the year gained 20 per cent and reached 13.5 fils compared to 11.2 fils in 2011.
Bank of Sharjah said it continued to enhance its balance sheet structure and improve its profitability with total assets increasing by 9 per cent as of December 31, 2012.
Loans and advances soared to Dh12.4 billion above the December 31, 2011 figure of Dh12.03 billion.
The continued increase in deposits over loans and advances has enhanced the loans-to-deposits ratio which further improved during the year to 0.76 in December 2012 from 0.81 in December 2011.
This led to the 26 per cent surge in net liquidity which reached Dh6 billion by the end of 2012 compared to Dh4.8 billion at the end of 2011.
However, the Sharjah-based bank saw its net interest income drop 6 per cent from Dh528 million to Dh498 million. The decline was mainly driven by the 10 per cent increase in deposits, in addition to the excess liquidity which is placed at extremely low interbank interest rates, it stated.
The 11 per cent increase in non interest income was driven by the improvement witnessed in the financial markets during the last quarter of the year.
The collective impairment provision for the 2012 year has declined against a backdrop of an improved economic environment and the overall performance of the credit portfolio. During the year, the Bank has set aside Dh115 million of such provisions, raising the Bank’s cumulative balance of collective impairment provision to Dh658 million.
Commenting on the results, Varouj Nerguizian, the bank’s executive director and GM said, “The 2012 results affirmed the solid structure of the balance sheet. Bank of Sharjah’s ample liquidity in addition to its expansion strategy will competitively position the lender and allow it to take full advantage of the positive developments in the economical scene of the UAE."
"While profitability improved by 13 per cent it remained subdued by across the board application of new regulatory guidelines geared more towards retail activity than the corporate model of the Bank. The real potential of the bank will be revealed by a number of positive developments in strategic investments during 2013-2014," he added.-TradeArabia News Service