Ithmaar to focus on core activities
Manama, March 31, 2013
Shareholders of Ithmaar Bank, a Bahrain-based Islamic retail bank, today threw their weight behind the bank’s plans to increase its focus on core banking activities while working towards restructuring its investment portfolio.
Ithmaar Bank chairman Prince Amr Al Faisal said the strategy is in line with the bank’s commitment to becoming the region’s premier Islamic retail and commercial bank, according to a statement.
Speaking after chairing the annual general meeting of the bank’s shareholders, Prince Amr said the bank is on the right track following its reorganisation, in April 2010 with its then wholly-owned subsidiary, Shamil Bank, and its subsequent transformation into an Islamic retail bank.
“Ithmaar Bank’s core banking business on a standalone basis has done consistently well,” said Prince Amr. “We are posting a 26% year-on-year (YoY) growth in financing assets and a 31% YoY growth in customer funds (URIA and current accounts). Our post-April 2010 reorganisation and retail focus has resulted in an 80% surge in new customer relationships. In fact, we grew our customer base by over 18,000 new relationships in 2012 alone, which is about 20% of our present total built over a 30-year history,” he said.
“We are investing in people and technology, and our results have been recognised through local and international awards,” said Prince Amr. “Our market share, as benchmarked against the statistics of the Central Bank of Bahrain, show gains on all key retail banking product offerings - current accounts, home financing, vehicle financing and personal financing,” he said.
“Our other lines of business are also progressing well,” he said. “Corporate banking is breaking new ground in Saudi Arabia. The weighted average tenor of Mudaraba deposits has almost doubled since Ithmaar’s transformation, while at the same time we were able to, since then, significantly reduce the financing costs, indicating a growing investor confidence. Looking inwards, we have introduced several measures such as cost rationalisation, strengthening our internal controls and enhanced our reporting, financial and risk management as well as audit frameworks,” he said.
“Although we have, clearly, got our fundamentals right and are moving in the right direction, we posted a consolidated net loss attributable to shareholders amounting to BD11.5 million for 2012,” said Prince Amr. “This is, however, less than half the BD23.7 million loss reported in 2011, and a huge improvement over the preceding two years. It is, also, encouraging to note the turnaround in profit, before impairment and taxation, of BD12.8 million for 2012, compared to a loss of BD14.3 million in 2011 as well as the key fact that total income has grown by 7.9 percent, to BD183.4 million in 2012 from BD170 million in 2011,” he said.
Ithmaar bank chief executive officer and member of the board, Mohammed Bucheerei, said the achievements stood testimony to the bank’s successful transformation and stressed that the management team is committed to realising the board-approved vision of becoming the region’s premier Islamic retail bank.
“In 2012 we continued our aggressive retail expansion programme, adding new branches and Automated Teller Machines (ATM), improving our products and services and introducing new, award-winning solutions,” said Bucheerei. “The results of these efforts are already bearing fruit, with operating income, for example, increasing by 32.7 percent to BD87.5 million in 2012 from BD66 million in 2011,” he said. - TradeArabia News Service