Eskan Bank, a leading mortgage lender and real estate finance developer in Bahrain, said its net profit rose 46 per cent in the first quarter to BD1.9 million ($5 million) compared to BD1.3 million during the same period last year.

Eskan said it has been able to achieve a steady growth and maintain its profitability during this quarter despite the difficult business environment.

The continued support from the government has been pivotal in providing subsidised tourism services by the bank's subsidiary Southern Tourism Company (STC), it added.

The grant received from the government in the first quarter has helped in supporting the operations of STC.

'The bank sets the housing sector as its top priority and that it seeks to explore ways of easing the burden on the government budget by contributing in finding various housing and financing solutions,' remarked chairman Basim Bin Yacoub Al Hamer.

'The bank continues to be the largest mortgage lender in the kingdom. It has a strong capital base with a capital adequacy ratio of 93 per cent as at the end of March. It plans to strengthen its paid-up capital by recapitalising its retained earnings,' said Al Hamer.

According to him, the bank continues to be the financial arm of the Housing Ministry. It is in the process of finalising a medium-term syndicated loan facility to meet its future funding requirements.

Both domestic as well as international banks participated in the tendering process.

The bank is currently reviewing the mortgage guarantee system, which would support the creation of primary and secondary markets to ensure sustainability of the mortgage business which will allow Bahrainis to own their homes.

The bank showed continuous growth in loan balances, which grew from BD266.9 million at this time last year to BD284.8 million.

Despite the difficulties the bank has strived to meet its client's requirements and strengthened its asset base, which rose from BD442.3 million to BD453.2 million.

The main reason for the growth in net profit is attributed to the constant growth in the core businesses of the bank and its housing loans portfolio, which reflected positively on the growth of the net revenues.

Besides, it has succeeded in diversifying its revenue sources especially through commercial mortgages and effective asset liability management which has contributed to greater income streams through the associated fees and commissions.

The bank has also developed a strong technology platform which has enabled the bank to improve its productivity.

Through its investment banking and project financing initiatives, the bank develops a partnership between the public and private sectors to accelerate the implementation of social housing in the kingdom.

The bank is currently developing six community projects at Hamad Town and Hamala which is scheduled for completion by the end of the third quarter of 2011.-TradeArabia News Service