Manama: Bahrain-based Arab Banking Corporation (ABC) reported its consolidated group net profit for the first half of 2014 of $137 million, a 22% increase when compared to $112 million for the same period last year.
The bank statement added its net profit for the second quarter was $66 million, an 18% higher than $56 million reported last year.
Total operating income for the second quarter amounted to $242 million on the back of growth in business volumes across all our geographies. This was 15% higher than the $210 million achieved during the same period last year.
Operating expenses decreased 2% to $113 million compared to last year which had included one-off restructuring costs. Cost to income ratio improved to 46.7% from 54.8% mainly from revenue growth. Net impairment provisions for the second quarter of $19 million was higher than $10 million in the same period last year, however, net charge for the half-year at $27 million was lower than $38 million for the same period last year.
ABC Group’s total assets registered a growth of 6% during 2014 to stand at $28.1 billion as of 30 June 2014, reflecting growth in loan volumes and liquid assets. The ratio of non-performing loans (NPLs) to gross loans declined to 2.5% from 3% at 2013 year-end. The Group has maintained a diverse and primarily short term asset book with 56% of assets having a tenor of less than 1 year.
Deposits grew 8% in the first half of the year to $19.7 billion from $18.3 billion at 2013 year-end. The Group’s liquidity position continues to be strong with liquid assets to deposits ratio at 59% (63% at 2013 year-end). Liquid assets ratio stood at 42% (44% at 2013 year-end).
Shareholders’ equity at 30 June 2014 stood at $3,980 million, compared to $3,897 million at the end of the first quarter 2014 and $3,940 million at 2013 year-end. ABC’s capital base remains very strong, with a capital adequacy ratio of 20.7%, predominantly Tier 1, which totalled 17.3%. Adjusted to Basel III basis, in line with the Central Bank of Bahrain’s draft rules, the Group’s total capital adequacy ratio is 20.3%, and its Tier 1 ratio is 17.4%.
“I am happy to see the excellent half-year results which show year-on-year profit growth for the sixth consecutive year,” ABC’s Chairman, Saddek El Kaber, said.
“During the first half of the year, we have also strengthened our management team with the addition of a new Group Chief Banking Officer, Group Chief Financial Officer and Group Head of Compliance, all with significant international banking experience. I am confident that with our reinforced top management team in place, and with substantial capital resources and comfortable liquidity, ABC will be able to continue on its growth path with robust risk management to deliver sustained returns for our shareholders.”
ABC is a leading international bank in the MENA region and provides innovative wholesale financial products and services that include corporate banking, trade finance, project and structured finance, syndications, treasury products and Islamic banking. It also provides retail banking services through its network of retail banks in the region.