Arab Banking Corporation (ABC), the Arab world’s biggest bank in asset terms, says it increased its assets and liabilities in Middle East and Asian markets last year, while Western Europe became less important to its balance sheet. The Bahrain-based bank, which has just released its annual report, has already reported an 11 per cent rise in net profits in 1996 to $129 million on assets of $22,988 million (MEED 7:3:97).
The former chief executive of ABC Ahmed Abdullatif, who left in February, told MEED last year: ‘ABC’s presence in Europe and the Americas has come to a saturated point.’ The balance sheet appears to bear this out: the proportion of ABC’s assets and liabilities in Western Europe fell from 50 per cent of the total to 47 per cent and 43 per cent respectively, while the totals for Asia and the Arab world grew proportionately. The bank’s business in the West did not change much in size during 1996, but more new assets and liabilities were taken on in other regions. The bank’s worldwide strategy is under review by management consultants Arthur Andersen. ABC is majority-owned by the governments of Kuwait, Libya and Abu Dhabi.
Operating profits actually fell slightly in 1996, but a hefty $52 million fall in loan-loss provisions helped to produce the rise in net profit. The bank now has $925 million in non-accrual loans, down from $1,265 million in 1995. All of ABC’s subsidiaries around the world reported an increase in net profit in 1996.
Banco Atlantico of Spain reported a 25 per cent rise to $40 million, and the Hong Kong retail bank International Bank of Asia (IBA) boosted its profits by 17 per cent to $47 million. IBA remains the stronger performer of the two: its balance sheet of $2,900 million is about one-third of the size of Banco Atlantico’s. ABC’s investment banking unit made $13 million in net profits last year, up 37 per cent on the year before. ABC International Bank, which is based in London, has also reported a strong performance (MEED 2:5:97).