BBK has reported a 7.1 per cent growth in net profit at BD14 million ($37.13 million) for the three months ended March 31, when compared with BD13.1 million for the same period last year.

The earnings per share reported for the period were 14 fils per share, as against 13 fils per share in the corresponding previous period, reported the Gulf Daily News, our sister publication.

"Prudent risk management, diversified investment, innovative technology, as well as optimised expenditure on human resources and capital infrastructure, were the focus of the management to achieve these very satisfying results, despite the challenging and competitive operating environment of the banking sector," chairman Murad Ali Murad said.

The bank expects to continue doing well for the remainder of the year, reaping the benefits of cost optimisation initiatives implemented during 2013.

Despite the challenging loans market in Bahrain and shrinking margins, BBK's net interest income increased to BD17.1 million in March, he said.

Fee income generated from loans, credit cards, commercial services, and other services increased 12 per cent to BD6.7 million. Foreign exchange and investment income at the end of first quarter this year was BD4.8m.

In line with a conservative approach, the bank's reserve provisioning during the quarter was BD3.2 million, mostly in the form of discretionary provisions against unexpected deterioration in the market.

Operating expenses have reduced by 7.6 per cent from BD12.4 million as of March last year to BD11.4 million. Cost to income ratio has also improved from 42.6 per cent to 39.9 per cent.

Comprehensive income has grown 19 per cent to BD20.3 million for the quarter when compared with BD17 million reported for the same period of last year.

Income was affected positively by the improvement in fair market value of the investment portfolio by BD1.4 million (34.4 per cent increase compared to the same period of last year), which also increased net profit by BD1m and improved the foreign currency translation adjustment of BD0.9 million.

BBK's financial position shows a growth of 3.8 per cent to BD3,321 million compared to its position as of the end of the same period of last year.

The growth in the balance sheet was due to increase in loans and advances portfolio by 12.2 per cent to BD1,728 million (March 2013: BD1,540 million), and the increase in non-trading investment portfolio by 1.3 per cent to BD727 million (March 2013: BD718 million).

Growth in assets was fuelled by growth in customer deposits portfolio from BD2,216 million to BD2,275 million.

The liquid assets ratio (cash and balances with the CBB, treasury bills, and deposits with banks to total assets) was 22.1 per cent when compared with 25.5 per cent as of March 2013, while the loans to deposits ratio was 66.1 per cent (March 2013: 60.7 per cent).

"We are pleased about the steady return offered to shareholders, particularly that whole revenues continue to be generated from core activities," chief executive Abdulkarim Bucheery said.

"This was despite the competitive environment that kept squeezing margins and pressurising pricing decisions," he said. – TradeArabia News Service