Bahrain-based Arab Banking Corporation (ABC) has reported a 22 per cent increase in consolidated net profit at $137 million for the first half of this year, compared with $112 million for the same period last year.

The net profit for the second quarter was $66 million, 18 per cent higher than $56 million reported for the same quarter last year, said a report in the Gulf Daily News (GDN), our sister publication.

The total operating income for the second quarter amounted to $242 million on the back of growth in business volumes across all its geographies.

This was 15 per cent higher than the $210m achieved during the same period last year.

Operating expenses decreased two per cent to $113 million compared with last year which had included one-off restructuring costs.

Cost to income ratio improved to 46.7 per cent from 54.8 per cent mainly from revenue growth.

Net impairment provisions for the second quarter of $19 million were higher than $10 million in the same period last year.

However, net charge for the half-year at $27 million was lower than $38 million for the same period last year.

ABC Group's total assets registered a growth of six per cent to $28.1 billion as of June 30, reflecting growth in loan volumes and liquid assets.

The ratio of non-performing loans to gross loans declined to 2.5 per cent from three per cent at last year-end.

The group has maintained a diverse and primarily short-term asset book with 56 per cent of assets having a tenor of less than one year.

Deposits grew eight per cent in the first half of the year to $19.7 billion from $18.3 billion at last year-end.
The liquidity position continues to be strong with liquid assets to deposits ratio at 59 per cent (63 per cent at last year-end).

Liquid assets ratio stood at 42 per cent (44 per cent at last year-end).

Shareholders' equity as of June 30 stood at $3,980 million, compared with $3,897 million at the end of the first quarter and $3,940 million at last year-end.

ABC's capital base remains strong, with a capital adequacy ratio of 20.7 per cent, predominantly Tier 1, which totalled 17.3 per cent.

Adjusted to Basel III basis, in line with the Central Bank of Bahrain's draft rules, the group's total capital adequacy ratio is 20.3 per cent, and its Tier 1 ratio is 17.4 per cent.

'The half-year results show year-on-year profit growth for the sixth consecutive year,' ABC chairman Saddek El Kaber said.

'During the first half of the year, we have also strengthened our management team with the addition of a new group chief banking officer, group chief financial officer and group head of compliance, all with significant international banking experience.

'I am confident that with our reinforced top management team in place, and with substantial capital resources and comfortable liquidity, ABC will be able to continue on its growth path with robust risk management to deliver sustained returns for our shareholders,' he added. - TradeArabia News Service