Bahrain Islamic Bank, the oldest Islamic bank in the Kingdom, on Wednesday said that its balance sheet footing had registered 2.5 per cent growth in 2010 and customers’ deposits surged BD78 million compared to 2009, an increase of 15 per cent which shows the success of bank’s business model.
Khalid Abdulla Al Bassam, Chairman of the Board, in a statement said that the board of directors had approved the bank’s financials for the year ended on 31st December 2010.
He added that the bank keeping in views its financial standing and to enhance its assets continued to build its finance and investment portfolio provisions and decided on a capital increase.
For 2010 the bank reported losses of BD39.7 million, compared to net loss of BD19.4 million in 2009 with fourth quarter’s losses of BD29.8 million.
The losses were result of substantially providing for both finance and investment portfolios to the range of BD38.4 million provisions to cover some of the non-performing loans in the corporate and retail books. The losses, the statement added, were partially because of the deterioration of the prices and values of the bank’s investments in investment funds managed by some local banks and also the fall of some of the bank’s investments in some local closed and publicly listed in Bahrain Bourse companies, in addition to the provision set aside for decline in the values of the bank’s real estate portfolio.
The board, Al Bassam said, agreed to convene both the ordinary and extra ordinary general meetings each for a meeting to be held on February 8th 2011 to discuss items listed in the agenda and to approve the capital increase which will be directed towards increasing the bank’s local market share and business activities, to diversify and protect bank’s assets, increasing income from core banking services, to satisfy demand on different finances, and to seize arising opportunities in the financial markets.
“What has been accomplished in the last five years reflects the right track for the bank where it relied fully on income and fees from its core finances and activities which are accounting now for more than 89% of total operational income and that income is free of any revaluations or unearned profit,” Mohammed Ebrahim Mohammed, CEO of the bank in a statement said.
“Everyone is optimistic about the future as bank is getting great confidence in receiving the required amount of the capital increase up to BD54 million. This capital increase has been regarded as a good opportunity since the issue price is kept at 100 fils which is par value of the share for one of the most prominent of BIsB and as the major reason for the increase is to satisfy the growing demand in core banking operations.
“During the past few years the bank has reviewed and enhanced its entire infrastructure and then he showed the great emphasis and care put on staffing through continuous education and training so as to prepare strong and qualified bankers who will be able to take over in the future. All this has led the bank to incur more expenses in the last few years, but which resulted in excellent services been provided by the bank. An accomplishment acknowledged by peers and clients which confirms the pioneering role played by the bank in employing national staff to the range of 97% of total employees,” he added.