Bahrain's Arab Banking Corporation profit grows 25 per cent

26 April 2010

Profit for first quarter is $41m

Bahrain’s Arab Banking Corporation (ABC) has reported group net profits of $41m for the first quarter of 2010, a 25 per cent increase from the same period last year.

Total revenue amounted to $170m, a 22.3 per cent increase from the $139m generated in the first quarter of 2009.   

Increased income was achieved from higher loans, documentary credits as well as treasury activities across the ABC group, despite reduced asset volumes from de-risking initiatives in the wholesale banking segment.

The bank’s continued efforts to de-risk resulted in total assets shrinking to $25.5bn at the end of the first quarter from $26bn at the end of 2009, mainly from a decline in securities portfolio.

Operating expenses increased by 11.4 per cent to total $88m, compared to US$79m for the same period last year, while the cost/income ratio declined to 52 per cent from 57 per cent last year.

Meanwhile, net impairment provisions totalled $12m, a 20 per cent decline from the $15m last year.

The $1.11bn rights share issue completed during the quarter boosted shareholders’ equity to $3.2bn as of 31 March 2010.

With the enhanced capital base, ABC’s capital adequacy ratio strengthened to 21.8 per cent, and most of this was tier 1, which made up 18.8 per cent.

The bank’s liquidity remains comfortable with liquid assets to deposits ratio at 74 per cent, compared with 71 per cent at the end of 2009.

“With the fifth straight quarter of positive results after weathering the difficult events of 2008, we are now firmly on the path of steadily increasing profitability,” says Hassan Juma, ABC’s president and chief executive.

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.