Al Baraka Turk Participation Bank, a subsidiary banking unit of Al Baraka Banking Group (ABG), announced that it had achieved a good increase of 35% in its net profit. It also increased its equity by 18 %, total assets by 27%, deposits by 29 % and financing and investments by 30 % in 2010.
As a result of the repercussions of the global economic crisis, year 2010 was full of economic and financial challenges in the Turkish market. However, Al Baraka Turk Participation Bank, because of its ability to deal effectively with these challenges, and its possession of extensive resources and a wide branch network, was able to capitalize upon the circumstances arising from the crisis to expand its investment and financing portfolio and at the same time strengthen its liquid assets to enable it deal with all possibilities. As a result, the financial results of the bank showed an increase in total operating income by 3% to $281 million in 2010. The bank earlier reported net income increased by 35% to $94 million in 2010.
In 2010, the assets of the bank increased by 27% to $ 5.5 billion compared with $4.3 billion in 2009. This growth was the result of increases in financing and investments which increased by 30% to $4.4 billion. This growth was financed by increasing the Bank’s range of investment products which led to an increase of 29% in customer deposits and unrestricted investment accounts to reach $4.7 billion in 2010, which funded 86% of the total assets of the bank and which in turn reflects the bank’s strong customer and deposit base. The bank also strengthened its shareholders equity by 18% to $552 million in total as at the end of 2010.
“We are very pleased with the excellent results that the Bank achieved in 2010. Such excellent achievements were the result of the hard work of the executive management and all the employees of the Bank as well as the strong support that the parent company (ABG) extends to its subsidiary banks, which helped to consolidate the Bank’s position in the Turkish market,” Adnan Ahmed Yousif Chairman of the Board of Directors of Al Baraka Turk Participation Bank and President and Chief Executive of ABG said.
“Turkey is considered as one of the key markets for the Group because of the diversity and abundance of economic activities and huge promising opportunities that it offers,” he added.
“With the continuing and steady growth of Al Baraka Turk Participation Bank over the past decade, the bank has now passed the threshold of a small bank and can be said to qualify as a major player in the Turkish market. Reaching such maturity has prompted the bank to review both its Vision and its Mission, with a view to redefining its ambitions and future growth aspirations,” he said.
“We are also proud of the re-affirmation of the Bank’s rating by the international rating agency Standard & Poor’s (S&P) in July 2010 with a long-term rating of BB / B (short term) and a stable outlook.
In their rating S&P remarked that the ratings reflected the good track record of Al Baraka Turk Participation Bank in the participation banking market in Turkey, its adequate funding resources supported by a strong deposit franchise and limited market risk. S&P expects the bank to maintain its asset quality and capitalization at the current levels. S&P further pointed out that the bank’s ratings were themselves only constrained by the BB country rating of Turkey”.
Fahrettin Yahsi, Member of the Board of Directors and General Manager of Al Baraka Turk Participation Bank, said that the Bank’s results had benefited from the good performance of the Turkish economy which witnessed a good improvement and registered a growth of 8.1% in 2010. “The authorities’ quick and effective action in 2009, introducing early tax incentives and steadily reducing interest rates throughout the year, aided the expansion of credit demand, the beneficial effect of which continued through 2010, raising domestic demand for goods and services in an atmosphere of high consumer confidence and surging private sector investment.”
“As ongoing expansion will naturally require an increase in staff levels both at the main office of the Bank and in its branch network, thus leading to greater demand for space, the bank has moved to a new headquarters building, fully fitted out with state of the art technologies and facilities,” he added.