MANAMA: Ithmaar Bank, a Bahrain-based Islamic retail bank, reported a net loss of US$8.8 million in 2014, significantly less than the net loss of US$79.3 million reported in 2013.
The results include a net loss for the quarter ended 31 December 2014 of US$13.7 million, against a net loss of $67.4 million for the same period last year.
Net loss attributable to equity holders of the Bank for 2014 amounted to US$15 million, compared to a net loss of US$80.4 million reported last year. This includes a net loss attributable to equity holders of the Bank for the three month period ended 31 December 2014 of US$16.2 million, as compared to a net loss of US$67.6 million reported for the same period in 2013.
The announcement, by Ithmaar Bank Chairman His Royal Highness Prince Amr Al Faisal, after the review and approval by the Board of Directors of the Bank’s consolidated financial results for the year ended 31 December 2014.
“On behalf of the Ithmaar Bank Board of Directors, I am pleased to announce that Ithmaar Bank continues sustainable growth in its core retail banking operations and has reported net profit before provision for impairment and taxation of US$29 million for 2014,” said HRH Prince Amr.
“This is evident in the significant growth of the Bank’s operating income which increased 14 percent to US$227.8 million in 2014, from US$199.9 million in 2013. This increase is mainly due to sustainable revenue growth across most income streams,” he said. “This transformation is, in a large part, a result of the strategic decisions taken by the Ithmaar Bank Board of Directors earlier in 2014 and the benefits of which will continue in 2015 and beyond,” HRH Prince Amr, added.
The decisions, which aimed at significantly transforming the Group’s operations, included the full conversion of Ithmaar Bank’s subsidiary Faysal Bank Limited Pakistan’s (FBL) remaining conventional operations to fully Islamic banking, divestment of non-core assets and cost rationalization measures across the Group.
“Total expenses for the year ended 31 December 2014, at US$198.8 million, are 1.9 percent higher than 2013 expenses of US$195.1 million,” HRH Prince Amr, said.
“The 2014 expenses include the one-off expenses associated with the Staff Voluntary Separation Scheme and the full year impact in 2014 of certain branches opened in 2013 in Pakistan,” he said.
“I am also pleased to report that the balance sheet continues to be stable,” HRH Prince Amr, said.
“Total assets increased by 6.18 percent to US$7.86 billion as at 31 December 2014, compared to US$7.4 billion as at 31 December 2013,” he said.
Ithmaar Bank Chief Executive Officer, Ahmed Abdul Rahim, said the Bank’s 2014 financial performance indicates that efforts to turn the group around are clearly paying off, as evident from the growth in the operating profits of 14 percent.
“I am pleased to report that in 2014 we have reduced our losses significantly from US$ 79.32 million to US$ 8.85 million,” said Abdul Rahim. “This indicates that our efforts are paying off and that we are on the right track,” he said.
“The additional liquidity generated in 2014 was deployed in Murabaha and other financings which increased by 5.63 percent to US$3.33 billion as at 31 December 2014, compared to US$3.15 billion as at 31 December 2013 and in investment securities, which increased by 35.3 percent to US$1.77 billion as at 31 December 2014, compared to US$1.31 billion as at 31 December 2013,” said Abdul Rahim.
“The Bank’s 2014 results show that, during the year, the equity of unrestricted investment account holders marginally grew to US$2 billion as at 31 December 2014 as compared to US$1.99 billion as at 31 December 2013, customers’ current accounts have increased by 8 percent to US$1.37 billion as at 31 December 2014, compared to $1.27 billion as at 31 December 2013, and deposits from banks, financial and other institutions have increased by 13.2 percent to US$1.47 billion as at 31 December 2014, compared to $1.3 billion as at 31 December 2013,” said Abdul Rahim. “This increase reflects growing customer confidence in the Bank and demand for its products and services,” he said.
“Ithmaar Bank is committed to becoming one of the region’s premier Islamic retail banks,” said Abdul Rahim. “To do so, we continue to develop our core Islamic retail banking operations while working to improve efficiencies and reduce costs,” he said.
“This growth is a result of the Bank’s commitment to listening closely to our customers, and working to realise their aspirations by continuously improving our products and services,” said Abdul Rahim.
“In 2014, for example, Ithmaar Bank introduced a full suite of new credit card solutions from MasterCard, substantially enhanced its popular prize-based savings account, Thimaar, and created new home, personal and auto finance products designed specifically to meet customer requirements,” he said.
“Ithmaar Bank operates one of the largest retail banking networks in Bahrain, with 46 ATMs and 17 full-service branches,” said Abdul Rahim. “While our key subsidiary, FBL, is amongst the top 10 banks in Pakistan and has 274 branches across all cities in Pakistan,” he said.
In 2014, Ithmaar Bank also signed a partnership agreement with the Bahrain’s Ministry of Housing and Eskan Bank to help address the Kingdom’s housing challenges. Under the agreement, Bahraini citizens are offered government-subsidised financing through Ithmaar Bank to help them buy their first homes as part of a national scheme designed to address the Kingdom’s housing challenges. The Social Housing Financing Scheme allows eligible citizens to finance their first homes through Ithmaar Bank by paying 25 percent of their monthly income towards the property’s monthly instalment with the rest being paid for by the Ministry of Housing through Eskan Bank.