Manama: Bahrain–based Securities & Investment Company (SICO), reported a net consolidated profit for the three months ended 31 March 2015 o BfD 1.4 million compared with BD 2.6 million for the corresponding period in 2014.
Operating income totalled BD 2.99 million versus BD 4.2 million the previous year. Basic earnings per share were Bahraini fils 3.3 compared with 6.0 fils for the first quarter of 2014.
Net fee and commission income for the first quarter of the year increased to BD 770 thousand from BD 721 thousand for the same period in 2014, reflecting the sustainable growth in assets under management resulting from new mandates received from local and regional institutional investors. Brokerage and other income decreased to BD 499 thousand from BD 742 thousand in the first quarter of 2014 due to the sudden and drastic drop in all GCC markets’ liquidity except for Saudi market during the first three months of 2015.
Net investment income for the first quarter of the year was BD 1.3 million compared with BD 2.45 million for the same period in 2014, while interest income grew to BD 379 thousand from BD 330 thousand in the first quarter in 2014. Total operating expenses, which include staff overheads, general administration and other expenses, reduced to BD 1.58 million from BD 1.67 million for the same period in 2014.
As at 31 March 2015, total balance sheet footings had increased to BD 123.6 million from BD 115.7 million at 31 December 2014. Assets under management grew to BD 374.1 million from BD 338.8 million at the end of the previous year; while assets under custody with the Bank’s wholly-owned subsidiary – SICO Funds Services Company (SFS) – grew to BD 1.75 billion from BD 1.64 billion at end-2014.
SICO continued to maintain a strong capital base, ending the quarter with shareholders’ equity of BD 58.9million compared with BD 61.1 million at the end of 2014, with the reduction due mainly to the dividends payout for the year ending December 2014 . Available-for-sale securities at the end of the first quarter of 2015 increased to BD 33.78 million compared with BD 28.8 million at the end of 2014, while investments at fair value through profit or loss stood at BD 15.6 million versus BD 17.3million at the end of 2014.
“The severe volatility witnessed by GCC markets in the fourth quarter of 2014 carried through to the first three months of 2015. The period was marked by continued uncertainty regarding oil prices, worsening geo-political tensions in some parts of the region, and a subdued performance by all GCC markets. Despite such challenges, SICO was successful in maintaining a reasonable level of profitability,” Shaikh Abdulla bin Khalifa Al Khalifa, Chairman of Securities & Investment Company, said.
“Encouragingly, fee, commission and brokerage income accounted for 43 per cent of total income, illustrating our success in maintaining the important balance between fee-based and proprietary income at 45 per cent .”
“In terms of market performance during the first three months of 2015, only Saudi Arabia and Bahrain ended the period in positive territory; while the other four markets declined. This was in stark contrast to the first quarter of 2014, during which all GCC markets performed positively, with the key performers being Dubai, up by 32 per cent,” Chief Executive Officer Ms Najla Al Shirawi, said.
“In addition, the price of Brent crude at the end of the period stood at US$ 55 per barrel compared with US$ 107 per barrel at the end of March 2014. Such factors affected SICO’s financial performance for the first quarter of 2015. Brokerage and other income is negatively impacted by the drop in average traded value of shares in the first quarter compared to the previous year. Bahrain and Abu Dhabi witnessed the biggest drop; with Saudi Arabia being the only market to have more liquidity this year.
“On a positive note, SICO’s asset management business maintained its strong growth trend during the period. Total assets under management grew by over 14 per cent compared with the corresponding first quarter of 2014 in addition to the increase in Asset Management income by 21per cent , while the Bank’s pan-GCC equity funds and mandates continued to outperform their respective benchmarks. Looking ahead, we expect to see markets recover in the second quarter, backed by the estimates of healthy growth in companies’ profits and the stabilization of oil prices. We are confident that our fee income will grow further, while our conservatively managed proprietary book will continue to contribute positively to our bottom line,” Ms. Al Shirawi said.