The bank in a statement said that its board of directors approved the bank’s financial statements for the year ended 31st December 2011.
Murad Ali Murad, the Chairman of the Board of Directors said that BBK produced good financial results, achieving a net profit of BD 31.8 million and the board recommended a dividend of 25 fils per share.
“It was a year which saw continued turbulence in world markets stemming in large part from the sovereign debt crisis in the Eurozone and the fear that the United States would fall back into recession. In addition to lacklustre global economic growth, there have also been a number of uprisings in countries across the Middle East and North Africa region. Bahrain itself has had periods of civil unrest which has been exceeded and this has inevitably had a negative impact on business sentiment locally. Despite these events, none of which were foreseen a year ago, the outstanding efforts of the BBK management team and all employees have ensured that BBK’s businesses have continued to perform well,” Murad said.
For the year ended 31st December 2011, the bank reported a solid growth in net interest income of 9.6% to reach BD58.9 million. Fees and commissions also grown by 3.9% compared to December 2010 to reach BD26.3 million.
Investment income stood at BD20.6 million compared to BD30.1 million for the period ended 31th December 2010. The investment income included BD9.2 million of income that arose from the exchange of BBK sub-debt notes to senior notes in November 2011. The bank has exchanged around 85 per cent of its subordinated notes with a senior debt notes. Since the exchange is done on a substantially different terms, it is accounted as an extinguishment of the old debt. The differences between the carrying amount of the old sub-debt (extinguished) or transferred to the investors and the new liabilities assumed is recognized as other income. Other investment income also includes a gain on the redemption of sub-debt of BD0.6 million (2010: BD 2.2 million). The investment income in year 2010 included non-recurring income arose from the sale of non-trading investments of BD17.1 million. BBK follows a prudent approach to risk management, where BD25.5 million was taken as provisions to cater against unexpected losses caused by market turbulences out of which around BD6 million was provision set to cater for the changes in the fair market value of investments
For the three months ended 31st December 2011, BBK reported a net profit BD4.7 million compared to BD7.9 million for the same period of last year, with net interest income of BD14.9 million, being higher by 37.0%, along with other income at BD18.2 million being higher than last year income by BD9.8 million, and provision charges at BD16.3 million, compared to BD0.5 million last year.
“2011 was the second year of BBK’s 2010-2012 of three-year strategic plan and we have continued to focus on implementing the key initiatives for growth outlined in this plan.
“The success of the adopted strategy can be evidenced by the growth achieved in the reported loans and advances, investments, and customer deposits, despite the prevailing slow down in the market,” Abdulkarim Bucheery, the CEO of the bank said.
BBK’s balance sheet as of 31st December 2011 stood at BD2.765 billion, a growth of 13% compared to last year. The growth in the balance sheet was driven by the growth of net loans and advances by 10.2% to stand at BD1.407 billion, and the growth in non-trading investment portfolio by 32.6% compared to December 2010 to reach BD564 million. Customer deposits on the other hand grew during the year by 30.3% to reach BD 2.076 billion, benefiting from the flights to quality that started when the Global Financial Crisis hit in 2008. Depositors remained focused on the quality of the institutions where they put their funds and despite the ratings downgrade to both the Kingdom of Bahrain and Bahrain banks, BBK has proved a favoured destination for funds.