The Net profit for the third quarter of 2012 was BD 538,000, compared to a loss of BD 863,000 for the corresponding period in 2011. For the first nine months of 2012,
Net interest income during the third quarter accounted for 20.36 per cent of total income, while net fee and commission income contributed 32.98 per cent, while brokerage and other income contributed 8.32 per cent, and net investment income 38.34 per cent.
Year to date, net interest income, net fee and commission income, and brokerage and other income contributed BD 933 thousand, BD 1.669 million and BD 544,000 respectively to operating income, while net investment income was BD 1.984 million. Operating expenses for the third quarter increased by BD 332,000 from the corresponding period the previous year. Year-to-date total expenses, which include staff overheads, general administration and other expenses, increased by 11.96 per cent for the first nine months of 2012 to BD 3.379million compared to BD 3.018 million for the same period the previous year.
“The financial and investment environment continues to be challenging both in the GCC and generally in the global markets. Heightened volatility and uncertainty remain the order of the day, leading to a substantial fall in GCC stock market volumes. While the investment business in general has been muted, the debt market is increasingly being recognised as an alternative source of borrowing and asset allocation throughout the region. In response to this trend, we were able to actively establish ourselves as a leading Bahrain-based regional player in the fixed income space. Another successful accomplishment during the period was the launch of our UAE subsidiary operation – SICO UAE – which is now fully operational and trading on both the Abu Dhabi and Dubai exchanges, and from which we anticipate healthy growth in the future. In addition, the asset management business continues to grow and deliver excellent performance, adding fixed income investment management to its scope with considerable potential, while our equity management expertise is well recognised both regionally and globally as a market leader,” Anthony Mallis, Chief Executive Officer of SICO, said.
Increased activity by SICO’s asset management business resulted in funds under management growing by 8.3 per cent from the end of 2011 to total BD 223.285 million as at 30 September 2012, while securities under custody with SICO’s wholly-owned subsidiary SICO Funds Services Company (SFS) were BD 877million
SICO continued to maintain a strong capital base, ending the first nine months of 2012 with BD 56.653 million in shareholders’ equity and a very strong consolidated capital adequacy ratio of 61 per cent, which is substantially higher than Central Bank of Bahrain requirements. The Bank currently has 42.86 per cent (or BD 41.576 million) of its balance sheet in cash and deposits, compared with 28.26 per cent (or BD 19.964 million) at the end of 2011, reflecting the prudent position that SICO continues to take with regard to the regional and international capital markets. Available-for-sale securities at the end of September 2012 were slightly up at BD 29.301 million (end-2011: BD 27.038), while investments at fair value through profit or loss increased to BD 18.086 million (end-2011: BD 16.738 million).
“We are delighted to be able to announce a respectable performance in the third quarter of 2012. The achievement underscores the continued effectiveness of the SICO’s strategy and sensible management principles based on product and asset diversification. Our clients continue to place significant value on our services.
“While it remains difficult, if not impossible, to predict what will happen in the short-term with any degree of accuracy and certainty, there is no doubt that the rest of the year will be extremely challenging. Until we see greater clarity, SICO will continue to stay on track, focus on what we do best, and try to do it better; always acting in the interests of our clients, shareholders and employees.”