MANAMA: The three-year strategy (2013-15) has impacted the bank’s business model positively not only a record upward trends in terms of profitability but also on the core business activities, according to a top official at the BBK board.
Murad Ali Murad, Chairman of the BBK board, on the sidelines of the bank’s annual general meeting (AGM) and extraordinary general meeting (EGM), told The24X7News Bahrain (www.twentyfoursevennews.com) that at the end of the three year strategy the bank was looking at another three-year strategy.
The annual general assembly meetings were attended by the overwhelming majority of 83.31% of total shareholding of the bank which reviewed and approved the financials for the year ended on December 31st, 2014.
“The three strategy 2013-15 has proved as a great success and the management is looking at 2016-18 strategy to sustain the growth patterns,” Murad, said, adding that 2015 and beyond would be seen an interesting in terms of global economic situation generally and the GCC specifically. “The GCC economies have had seen these economic shocks before and they had sustain well during times of uncertainties. We need to find opportunities in these challenging times and take all steps to see the economies will perform well,” he added.
Talking about the 2016-18 strategy Murad said that the management would announce the strategy in due course of time. In terms of seizing opportunities, he said, the BBK will continue to explore possibilities locally, regionally and internationally in all key business areas.
About Islamic banking he didn’t rule out BBK’s re-entry in this business but very cautiously after having being closed the subsidiary of the BBK which used to do business in Islamic banking.
Any opportunity, he said, including Islamic banking has to be viable in terms of outcome or end result.
Earlier, the shareholders also approved their proposed agendas including the distribution of cash dividends equivalent to 20% amounting to 20 fils per share and bonus shares of 5% for the year 2014. BBK share shall trade ex-dividend and ex-bonus starting from Wednesday 11/3/2015 and the adjusted price after the distribution of bonus shares will be 448 fils.
BBK had posted a record profit of BD 50.1 million for the year ended December 2014, 11.2% higher than the same period of last year of BD 45.1 million; with earnings of 50 fils per share (2013: 44 fils per share).
“Our strong results for this year reaffirm the success of the bank’s focus on implementing the key initiatives for growth outlined in its strategic plans. Our financial results tell their own story, and we believe that the Bank will continue as a major player in the domestic market, serving all sectors of Bahrain’s economy, while providing world-class services and products that reflect BBK’s pioneer position regionally and its strong reputation internationally,” Murad, said.
“Being the second year of BBK’s three-year corporate strategic plan, 2014 was a pivotal year – very successfully achieving planned objectives while beginning preliminary planning for the next cycle and intensifying the expansion and diversification activities that are so crucial to future growth. The coming year will be even more critical as we appraise our achievements in the last year of our current strategic cycle, and determine the best ways to develop as a financial services group in the future.”
The Bank’s strong performance was supported by the remarkable growth in Fees and Commission income, accompanied by a healthy increase in Net Interest income. Fees and Commission income significantly grew by 10.5% to BD 28.9 million compared to BD 26.2 million reported in 2013. Net Interest income stood at BD 72.3 million as of end of 2014 compared to BD 68.9 million reported in the same period of last year. The bank also generated strong FX and investment income of BD 16.3 million as of end of 2014.
The bank’s 2012-13 cost optimization initiative is now bearing fruits as operating costs remarkably decreased by 15.0% to reach BD 46.2 million as of end of 2014, compared to BD 54.4 million reported in 2013. BBK’s cost to income ratio has improved substantially from 48.4% as of end of 2013 to 39.3% as of end of 2014.
The bank continues to invest in its human resources and capital structure. During 2014, the Bank announced the re-launch of its Management Trainee Development Program for the seventh time since inception in 2004. Through this program BBK will contribute to the talent pool of the Kingdom in the area of banking and financial services, and it will continue to be the “Employer of Choice”, providing young Bahrainis the tools and expertise for a brighter life enabling them to contribute to the economy and the prosperity of the nation.
The bank also, has opened its fourth branch in New Delhi, India which is in line with the Bank’s growth vision in strategic locations, outside Bahrain, as the Indian market remains a main pillar in BBK’s international operations.
“BBK has a proud record of achieving successive annual increases in profitability. And by looking back on 2014, we can confidently say that it was an excellent year where we made notable progress in many areas, and continued to report record profits year over year. We could achieve those remarkable results through emphasizing a customer led strategy, where we strive to remodel ourselves and the bank to ensure we don’t only meet our customers’ expectations, but we exceed them. As we reach the end of the second year of our current three-year strategic cycle, our solid performance is a very good indicator that BBK is very well positioned to face any challenges that could be imposed by domestic or global markets, while continuing to serve our customers with delight and pride, the best banking services in the Kingdom,” A Karim Bucheery, Chief Executive, said.
BBK’s balance sheet as of 31st December 2014 registered a growth of 8.4% to reach BD 3.501 billion, compared to BD 3.231 billion reported in 2013. This was mainly due to strong growth in net loans & advances as well as the boost in non-trading investment portfolio. Net loans & advances grew by 14.1% to reach BD 1.846 billion, non-trading investment portfolio stood at BD 788 million compared to BD 744 million reported in December 2013. Customer deposits continued with its upward positive trend and grew during the year by 5.0% to reach BD 2.471 billion.