Al Baraka Banking Group (ABG), a Bahrain-based Islamic bank, has reported net profit of $143 million for the first half of the year.

While balance sheet items increased moderately. Total assets increased by five per cent, total financing and investments by five per cent, customer deposits by five per cent and total equity by three per cent as of end-June when compared with corresponding figures as of end-December, the bank said.

“We are pleased with the results, given the slowdown in global economic growth and the continuation of a number of political and economic risks surrounding countries in the region,” said ABG chairman Shaikh Saleh Abdulla Kamel, reported the Gulf Daily News (GDN), our sister publication.

The bank continues with its strategy relating to new products and services and expansion of customer base through increasing the number of branches, he added.

ABG deputy chairman Abdulla Ammar Al Saudi said the financial and operating results have surpassed internal projections for the current year.

“Financing and investment policies and activities during the period were focused on opportunities arising from the current situation, with ABG capitalising on resources and extensive geographical network,” Al Saudi said.

Total operating profit amounted to $445 million in the first half, which is six per cent lower when compared with $472 million during the first half last year.

After deducting all operating expenses which increased by three per cent, mainly due to growth in expenses related to opening new branches, the net income was $143 million for the first half, up by two per cent when compared with the first half last year, mainly due to lower provision requirements in the backdrop of improvement in asset quality.

Net income attributable to shareholders of the parent was $81m during the period, up by two per cent when compared with the figure for the same period last year.

Total assets amounted to $22.1 billion as at the end of June. The earning assets (financing and investments) amounted to $16.1 billion as at the end of June as against $15.4 billion at the end of December last year.

Customer deposits increased from $17.7 billion as of end-December to $18.6 billion as of end-June.
Total shareholders’ equity amounted to nearly $2 billion as of end-June.

For the second quarter, total operating income increased by nine per cent to $232 million, net operating income by 31 per cent to $110 million and net income by 15 per cent to $76 million, when compared with figures for the first quarter this year.

However, when compared with the figures for the second quarter last year, net income is up three per cent, whereas income attributable to shareholders of the parent increased by four per cent to $43.8 million.

According to ABG president and chief executive Adnan Ahmed Yousif the bank had estimated its net income during the period would see a slowdown, mainly because net profit during the first half last year included some extraordinary non-recurrent profits.

“Profit for the second quarter improved significantly compared with the first quarter, which confirms our determination to compensate for the slowdown in income during the second half of the year,” he added.

The subsidiary units of the group have continued expansion plans by opening new branches, with 54 opened last year and 17 during the first half, taking the total branch network of the group to 496 branches, spread over 15 countries.

“The ambitious expansion programme entails huge expenses related to the establishment of branches and equipping them with necessary human and technical resources.

“However, the returns in terms of profits, income, growth and expansion will be seen in the forthcoming years,” he added.

The bank has been working on modernising institutional, human and technical infrastructure by developing regulations, applications and practices of corporate governance, social responsibility, governance, compliance, anti-money laundering, training, risk management and FATCA regulations in accordance with latest international standards, the chief executive said.

“Initiatives during the current year include product launches, continuing improvement in internal operating environment, enhancing the unified group corporate identity and increasing inter-unit business,” Yousif added.

“Al Baraka also continues to study expansion into countries like Morocco, following that country’s enactment of Islamic banking law, and plans to attract Islamic financial institutions.

“We also look with great interest to the Indian authorities, expecting them to open the country to Islamic banking and encourage the entry of Islamic financial instruments.

“The Indian market is a huge and diverse market, full of opportunities, and close historic ties with GCC markets, which promise successful partnerships between banks and financial institutions on both sides,” he said. - TradeArabia News Service