MANAMA: Bahrain headquartered Al Baraka Banking Group (ABG) is likely to close the 2014 with growth of 8% to 10%, according to a top official at the Group.
Adnan A Yousif, President and Chief Executive of the AGB told The24X7News Bahrain (www.twentyfoursevennews.com) that if the global currency fluctuation is taken out, the growth will be around 15%, which is very healthy trend.
He said overall Islamic banking industry would also witness healthy growth in 2014 as the first three quarters of the year were very encouraging for these institutions.
Adnan, who is Vice Chairman of the Bankers association of Bahrain (BAB), was speaking after the BAB’s Meet the Press and said that he was confident that the banking sector in Bahrain would close 2014 on a positive note.
In terms of category, the BAB in its 2014 Overview said, the largest grouping of banks is wholesale Islamic with 12 institutions or 35 percent of the total followed by wholesale conventional with 9 institutions or 26 percent. Conventional Retail and Islamic Retail comprise 7 and 6 institutions representing 20 percent and 17 percent respectively.
Conventional retail banks have the largest share with $53.933 billion followed by conventional wholesale a touch lower with $53.145 billion. In the Islamic banking sector, Wholesale providers despite contributing the largest number of institutions only have $26.361 billion worth of assets while Islamic retail is the smallest sector with $19.978 billion.
This split between conventional and Islamic is clearly seen when assessing the average size of banks in Bahrain $4.514 billion in 2013 compared with $3.704 billion in 2009.
This means size of a conventional retail bank is $7.713 billion followed by Conventional Wholesale with average assets of $5.905 billion. Islamic Retail banks average $3.330 billion in size while Islamic wholesale banks constitute the smallest sector with $2.197 billion worth of average total assets.
Net profit, the most closely-watched indicator in banking, rose from $ 1.322 billion in 2012 to $1.826 billion in 2013. Conventional Retail posted profits of $ 940 million in 2013 followed by conventional wholesale and Islamic wholesale. Islamic retail posted a loss of $65 million in 2013 but this year there will be a positive gain as a result of profits from both Ithmaar Bank and KHCB as opposed to the losses posted a year earlier. Extrapolating net profits of approximately $953 million for the first half of 2014 shows that the banking sector is on target to exceed 2013’s total for the year although it will be significantly short of the $2.212 billion recorded during the peak of the real estate boom in 2007. However it does show a huge jump from the lows of 2009 when local banks posted losses of $1.460 billion for the year.