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Ithmaar shareholders review 2016 performance

MANAMA, March 30, 2017

Ithmaar Holding (formerly Ithmaar Bank) shareholders praised the transformation witnessed in 2016 with the successful completion of a major reorganisation as well as a complete turnaround in Ithmaar’s financial performance.

This followed an announcement that the reorganised Ithmaar became fully operational with the start of 2017, concluding the full implementation of plans for a new group structure that was designed to provide greater insight into the strength of the core retail banking operations and further facilitate the focused management of investment and non-core assets.

As a result of its focus on core retail banking business, Ithmaar earlier reported a net profit of $13.80 million for 2016, compared to a $46.40 million net loss reported for 2015. Net profit attributable to equity holders for the year ended 31 December 2016 was $3.28 million, compared to a net loss $60.80 million reported for 2015.

The announcements were made by Ithmaar board member Sheikh Zamil Abdulla Al-Zamil, who chaired Ithmaar’s Annual General Meeting (AGM) and the Extraordinary General Meeting (EGM) which followed.

Also present at the meetings, which were held at the Diplomat Radisson Blu Hotel in Bahrain, were Directors and members of the Ithmaar Executive Management team, representatives of its Sharia Supervisory Board, the Central Bank of Bahrain (CBB), the Ministry of Industry, Commerce and Tourism, statutory auditors PricewaterhouseCoopers, and the Bahrain Bourse.

The plans for a new group structure, which were discussed and approved at the last shareholders’ meeting on March 28, 2016, involved conversion of the commercial registration of Ithmaar Bank B.S.C into Ithmaar Holding.

Ithmaar Holding is licensed and regulated by the CBB and listed on the Bahrain Bourse and Boursa Kuwait. Following the conversion, Ithmaar Holding retains 100 per cent ownership of all assets formerly owned by Ithmaar Bank through two wholly-owned subsidiaries, Ithmaar Bank, an Islamic retail bank subsidiary which holds the core retail banking business, and IB Capital, an investment subsidiary, which holds investments and other non-core assets. The two subsidiaries are licensed and regulated by the CBB.

Sheikh Zamil said: “Throughout the year, the focus remained on implementing the new group structure while continuously developing our core retail banking business. Ithmaar’s performance in 2016 is testimony to the success of these efforts, and we are confident that this growth will continue following the completion of the reorganisation and the formal commencement of the new group structure with the start of 2017.”

Ithmaar chief executive officer Ahmed Abdul Rahim, said: “In 2016, Ithmaar conducted certain process-reengineering initiatives to improve efficiency at the branches as well as enhance customer experiences at all possible touch points,” said Abdul Rahim. “As a result of Ithmaar’s consistent efforts in Bahrain to enhance its products, expand its network and introduce new services, retail banking customer current accounts, savings accounts, Thimaar and URIA deposits, increased by 10.9 per cent in 2016, from $1.72 billion at the end of 2015 to $1.91 billion. Ithmaar’s financing business also increased by 7.2 per cent, from $1.18 billion at the end of 2015 to $1.27 billion. The growth was driven mainly by home financing, which increased by 51 per cent in 2016,” he said.

“Ithmaar’s success in 2016 is perhaps most clearly reflected in the growth in net income, before overseas taxation, which amounted to $36.74 million for 2016, a complete turnaround from a net loss of $17.07 million, before overseas taxation, reported for 2015. Total assets also increased to $8.34 billion as at 31 December 2016, an increase of 2.5 per cent from $8.14 billion as at 31 December 2015,” said Abdul Rahim.

 “This is, in a large part, a result of continuously improving Ithmaar’s products and services while also keeping costs and expenses under control. Total expenses for 2016, for example, amounted to $192.10 million, a marginal increase from the total expenses of $190.41 million reported for 2015, despite the continuous expansion of Ithmaar’s retail banking operations both in Bahrain and in Pakistan,” he said.

“Our focus on business growth and enhanced customer satisfaction, however, did not distract us from our commitment to our social responsibilities and, in 2016, we continued to making real and meaningful contributions to the community in which we operate” said Abdul Rahim. “This, along with our clear commitment to transparency, has not gone unnoticed and, in 2016, the World Islamic Banking Conference singled Ithmaar out from among the world’s Islamic banks and presented it with a prestigious international award in recognition of its Corporate Social Responsibility and Financial Disclosure,” he said.

“The achievements of 2016 are made all the more impressive by Ithmaar’s continuously improving financial performance,” said Abdul Rahim. “The balance sheet continues to be stable, and our customer deposits continue to grow as is evident from the equity of unrestricted investment account holders growing to $2.77 billion as at 31 December 2016, a 15.5 per cent increase compared to $2.40 billion as at 31 December 2015,” he said.

“This increase reflects customer confidence in Ithmaar, and is further evidence that efforts to grow continuously closer to customers are paying off,” said Abdul Rahim. “Current accounts and due to investors, for example, grew to $3.48 billion as at 31 December 2016, a 9.3 per cent increase compared to $3.19 billion as at 31 December 2015. Financings Murabaha, Musharaka and Ijarah also increased to $3.93 billion as at 31 December 2016, a 5.7 per cent increase from $3.72 billion as at 31 December 2015,” he said. – TradeArabia News Service




Tags: Bahrain | 2016 profit |

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