Bahrain-based ABC Islamic Bank, a wholly owned subsidiary of Arab Banking Corporation, has posted a net profit of $6.6 million for the first six months of 2009.

Net profit for the second quarter was $1 million compared to $5.6 million in the first quarter, primarily due to impact of the economic slowdown in the region, lower fee earnings and prudent impairment provisions taken for regional exposure.

Total income for the second quarter amounted to $10.6 million versus $13.7 million in the first quarter of 2009, which reflects lower business activities, rates and fees. In tandem, profit paid on Murabaha payables also decreased to $6 million versus $7.1 million reflecting lower rates.

Shareholders’ equity as at June 2009 stood at $151 million, compared to $135.2 million at the end of the first quarter, the increase during the quarter coming from improvement in fair values of available-for-sale investments as well as the profit for the period.

As a result the Capital Adequacy ratio improved to 18.9 per cent in June compared to 17.9 per cent in the first quarter and which is well above the required 12 per cent set by the regulator.

ABC Islamic Bank’s total assets remained largely unchanged at $1.37 billion in June, compared with $1.39 billion at the end of the first quarter.

“The results are in line with the profitable operations of the parent and reflect the challenges against the backdrop of the global economic slowdown,” said Naveed Khan, managing director.

“We feel optimistic that these challenges will be met adequately, and in line with shareholder expectations,” he added.

Meantime, ABC Islamic Bank remains very liquid, with improved solvency ratios and with all the resources of its  100 per cent shareholder Arab Banking Corporation. – TradeArabia News Service