Manama: Arab Banking Corporation (ABC) today announced that its consolidated Group net profit for the year ended 2014 was $256 million, a 7% increase when compared to $239 million for 2013.
Net profit for the fourth quarter was US$59 million as against $61 million reported in the previous year.
The Board of Directors recommend, for approval at the Annual General Meeting to be held on 22 March 2015 in Bahrain, a cash dividend distribution of 5% of the issued share capital (US$0.05 per share), amounting to US$155,500,000.
Total operating income rose to US$888 million from US$857 million in 2013 with broad based growth in revenues across all geographies and products contributing to the US$31 million increase, after absorbing the negative impact of the stronger dollar against the domestic currencies of some subsidiaries. Operating expenses amounted to US$439 million, a slight saving on the US$440 million reported in the previous year reflecting the interplay of cost saving initiatives combined with investments for future growth. Cost to income ratio improved to 49.4% from 51.3% in 2013, mainly from revenue growth. Net impairment provision charge of US$64 million, was US$15 million higher than in the previous year, which had benefited from some exceptional recoveries. Although the provision charge was higher, the ratio of NPLs (non-performing loans) to gross loans declined to 2.4% from 3.0% at 2013 year-end.
Whilst ABC Group’s total assets registered a growth of 11% during 2014 to stand at US$29.4 billion as of December 2014, the asset book remained diverse and primarily short term, with 59% of assets having a tenor of less than 1 year.
Deposits grew by 7% from US$18.3 billion at 2013 year-end to US$ 19.7 billion. The Group’s liquidity position continues to be strong with liquid assets to deposits ratio at 65% (63% at 2013 year-end). Liquid assets ratio stood at 44% (44% at 2013 year-end). The Group further diversified its funding profile in 2014 through its raising of new longer term borrowings of US$1.1 billion.
Shareholders’ equity at 31 December 2014 stood at US$4,006 million compared to US$3,940 million at 31 December 2013. ABC’s capital base remains very strong, with a capital adequacy ratio of 21.1%, predominantly Tier 1, which totalled 17.1%. Adjusted to Basel III basis, in line with the Central Bank of Bahrain rules, the Group’s total capital adequacy ratio is 20.8%, and its Tier 1 ratio is 17.5%.
“We are pleased to report another strong performance in 2014. The Group continued its growth across various geographies whilst managing well its expenses and cost of credit. We will continue to develop initiatives to enhance our earning capability ensuring sustainable growth in the years to come,” ABC’s Chairman, Saddek El Kaber, said.
“We thank our Shareholders for their unwavering support as well as the commitment of our staff to the Bank’s success.”
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.