MANAMA: Ithmaar Bank B.S.C. (Closed), a Bahrain-based Islamic retail bank, announced its financial results for the six-month period ended 30 June 2020.
The announcement, by Ithmaar Bank Chairman His Royal Highness Prince Amr Al Faisal, follows the review and approval of the Board of Directors of the Bank’s consolidated financial results.
Ithmaar Bank’s financial results show a net loss attributable to equity holders for the six-month period ended 30 June 2020 of BD2.03 million, a 196 percent decrease compared to the net profit of BD2.11 million reported for same period in 2019. The loss is mainly due to the economic impact of the global Covid-19 pandemic which included, among others, taking prudent impairment provisions.
Overall, the Bank’s results show a net profit for the six-month period ended 30 June 2020 of BD0.21 million, a 95 percent decrease compared to the net profit of BD4.10 million reported for the same period in 2019.
“On behalf of the Ithmaar Bank Board of Directors, I am pleased to report that, despite the unprecedented challenges presented by the ongoing global pandemic, the Bank continues to grow its core Islamic retail banking business,” said HRH Prince Amr. “This has included further enhancing the Bank’s online presence and its digital infrastructure, as well as developing new products and services to further improve its customers’ Islamic banking experience,” he said.
“This sets the stage for accelerated future growth when markets return to normalcy and, although the Bank did not report a profit attributable to equity holders for the period, it did report a net profit for the period and, more importantly, continues to demonstrate significant resilience to extraordinarily challenging conditions,” said HRH Prince Amr. “Customer deposits, for example, continue to grow despite the turbulent economic conditions, a powerful testimony to the market’s confidence in the Bank,” he said.
Total income for the six-month period ended 30 June 2020 was BD93.25 million, an 18 percent increase compared to the total income of BD79.19 million reported for the same period in 2019, mainly due to increases in core income, particularly the Bank’s share of income earned as a Mudarib. Operating income for the six-month period ended 30 June 2020 was BD50.18 million, a 24 percent increase compared to the BD40.36 million reported for the same period in 2019.
Ithmaar Bank’s total assets remained stable, at BD2.99 billion as at 30 June 2020, a nominal 0.4 percent increase compared to BD2.98 billion as at 31 December 2019.
Total owners’ equity stood at BD61.68 million as at 30 June 2020, a 22 percent decrease compared to BD79.17 million as at 31 December 2019, resulting mainly from the day-1 modification loss for six months due to deferment of customer instalments to help the customers overcome the economic impact of the Covid-19 pandemic.
Total consolidated equity, as at 30 June 2020, is below the minimum BD100 million required by the Central Bank of Bahrain (CBB) and the Board of Directors are working on issuing Additional Tier 1 capital (AT1) of up to BD67 million to strengthen the Bank’s consolidated equity and meet the regulatory requirements. The Bank is currently in the process of obtaining necessary regulatory approval for this issue.
Despite challenging market conditions, the equity of unrestricted investment account holders grew to BD1.17 billion as at 30 June 2020, a 10.4 percent increase compared to BD1.06 billion as at 31 December 2019. Customers’ current accounts also grew to BD595.99 million as at 30 June 2020, a 4 percent increase compared to BD572.47 million as at 31 December 2019.
“The growth in customer deposits, particularly during these challenging times, reflects customer confidence in the Bank and reconfirms that efforts to grow closer to our customer are, indeed, paying off,” said Ithmaar Bank Chief Executive Officer, Ahmed Abdul Rahim.
“Ithmaar Bank is determined to become the Islamic retail bank of choice,” said Abdul Rahim. “To help realise this shared version, we invest tremendous time, money and effort on continuously enhancing our products and services and on growing closer to our customers to enhance their banking experience,” he said.
“This is a commitment we take very seriously, and we continue to invest on it, despite the challenging market conditions,” said Abdul Rahim. “In line with our ongoing efforts to encourage customers to bank online for example, and as part of our award-winning digital transformation strategy, the Bank has recently launched an all-new mobile application (App). The mobile app, which was designed from the ground up specifically to enhance customers’ online banking experience while reducing the need to physically visit a branch, allows users to instantly open an account directly from their mobile phones. Following the launch, Bahrain citizens and residents can now securely open an account in just a few minutes by simply downloading the Ithmaar Bank App – without ever having to visit a branch,” he said.
In June, despite the dramatic economic slowdown imposed by the global Covid-19 pandemic, Ithmaar Bank announced the opening of a new branch in Hamad Town, effectively relocated the Al Hamalah branch to a new, better and more accessible location with ample parking facilities.
Earlier in the year, Ithmaar Bank, in collaboration with MasterCard, launched a new service that allows Ithmaar Bank customers to transfer money from Bahrain to various countries around the world almost instantly. The service, called IthmaarSEND, is provided to customers directly from the Ithmaar Bank eBanking platform and offers a faster, simpler and more secure way of transferring money abroad from almost anywhere in the world, through mobile phones, tablets or any other internet-connected device. The Bank had also earlier announced that customers can message the Ithmaar Bank Call Centre number 13303030 to request information through WhatsApp about the Bank’s products and services, as well as make any other general inquiries.
The Bank’s unwavering focus on its core retail banking business is building a stable foundation while setting the stage for continued growth. This, in turn, has earned the Bank key awards reflecting its ability to stay ahead of the curve both locally and regionally as well as highlighting the significance of its digital initiatives.
In December 2019, Ithmaar Bank was named “Fastest Growing Islamic Fintech Bank” at the World Islamic Banking Conference (WIBC). The prestigious award was presented by CBB Governor, Rasheed Mohammed Al Maraj, at the WIBC. According to organisers, the award is granted to the top Islamic financial institutions based on their aggregate performance scores against multiple measures on a global and regional level. Award recipients are those that secure the top aggregate score at the global and regional level.
