Monday 25 January 2021

BBK posts $149.6m net profit for 2016

MANAMA, February 28, 2017

BBK, a leading retail bank in Bahrain, has announced a net profit of BD56.4 million ($149.60 million) attributable to owners for the financial year ended December 31, 2016.

The net profit is 6 per cent higher compared to the previous year (2015: BD53.2 million) with earnings of 49 fils per share (2015: 50 fils per share), the bank said in a statement.

The financial results were reviewed and approved by the bank’s board of directors during its meeting held yesterday (Feb 27). In view of these results, the board recommended distribution of 30 fils cash dividend per share subject to the approval of the Central Bank of Bahrain and the General Assembly of the bank.

The board expressed its satisfaction saying: “2016 was the first year of the bank’s three-year strategic cycle, and we are very satisfied with the progress achieved – both in terms of results and in preparing for the future. BBK has maintained a consistent performance that has been our hallmark for so long and was able to post a good profit despite the difficult business environment at home and abroad. Low oil prices, the slowdown in the Chinese economy, Brexit and the US elections added to uncertainty and the subdued macroeconomic conditions, and were all factors that have not been conducive to growth or expansion. However, by relying on our expertise, the strength of our strategy and management team, the robust financial and human capitals, as well as the solid relationships and the trust we built with our clients and other stakeholders over decades, we were able to turn 2016 into a year of achievements and deliver a very commendable across-the-board performance.”

Operating revenues increased by 10.2 per cent to reach BD133.5 million compared to BD121.1 million recorded during the previous year, driven mainly by a growth of 18.1 per cent in net interest income to reach BD85.8 million (2015: BD72.7 million), as the bank restructured its balance sheet by focusing strategically on more profitable segments such as retail, reducing thinly priced exposures and adequately controlling the cost of funding. In addition, strong performance by the bank’s strategic investments contributed to the growth in operating revenues as the bank’s share of profits of associated companies and joint ventures increased by 29.7 per cent from BD4.2 million reported in 2015 to BD5.5 million for the year ended 2016. Other income (fees and commission, foreign exchange and investment income) for the year 2016 amounted to BD42.2 million (2015: BD 44.2 million).

The continuous investment in human capital and expanding, enhancing and automating operations and distribution networks, as well as investment in the bank’s strategic initiatives for the current strategic cycle resulted in operating expenses increasing moderately by 6.6 per cent for the year ended December 31, 2016. Nevertheless, the cost-to-income ratio improved to 39.8 per cent compared to 41.1 per cent in 2015, reflecting the bank’s prudent management of operating expenses and the ability to generate healthy growth in income streams.

The bank has decided  to early adopt IFRS 9 following the approval received from the Central Bank of Bahrain (CBB) making BBK, amongst the first banks in the region to implement this new  accounting standard, replacing IAS 39. Under IFRS 9, impairment assessment and provisioning practices are more dynamic as banks are required to calculate provisions based on life-time expected losses, rather than relying on incurred losses as was the case under IAS 39. This has resulted in higher net provision charges of BD22.6 million, compared to BD19.5 million during 2015. Provision coverage ratio (inclusive of the collective provisions) as of end of December 2016 stood at 112 per cent compared to 119.5 per cent in December 2015, it said.

Total comprehensive income for 2016 stood at BD67.3 million compared to BD20.1 million for the year ended 2015. The increase in total comprehensive income resulted mainly from the significant improvement in fair value of investment securities.

For the three months ended December 31, 2016, BBK reported a net profit of BD13.2 million, compared to BD13.0 million recorded during the corresponding period of 2015.

Chief executive Reyadh Sater said: “BBK was once again able to break previous record profits, and vigorously pursue and achieve a notable progress with the implementation of its new strategy. We expanded and improved our presence locally by adding a new branch in Hidd and replacing the Refinery branch with a larger and more conveniently located branch in Sanad. Internationally, we expanded our footprint by opening a Representative Office in Turkey, situated in a prominent location in downtown Istanbul, and our plan to establish a joint venture investment firm in London is at an advanced stage of implementation. Moreover, BBK’s subsidiary, Invita, launched the Invita Training Center (ITC),  an internationally accredited training services provider focused on providing organizations and individuals with foundation-level, world-class certified training programs”.

BBK’s balance sheet stood at BD3,702.6 million as of end of December 2016 compared to BD3,646.4 million as of end of December 2015. The loans portfolio stood at BD1,767.1 million (December 2015: BD 1,764.8 million). The investment securities portfolio slightly increased by 1.3 per cent to BD768.1 million (December 2015: BD 758.1 million). - TradeArabia News Service

Tags: Bahrain | BBK | profit | Bank |

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