Manama: Al Baraka Banking Group BSC (ABG), the leading Islamic banking group with its headquarters in the Kingdom of Bahrain reported a net income, attributable to equity holders of the parent, of US$ 47 million in the first half of 2020 compared to US$ 56 million for the same period of 2019, a decline of 16%.
ABG is traded at Bahrain Bourse and Nasdaq Dubai (under the trading code Barka).
While the total Group’s net income recorded during the first half of 2020 was US$ 90 million compared to US$ 95 million for the same period of 2019 with a 5% decline. The basic and diluted earnings per share for the first half of 2020 was US Cents 2.54 compared to US Cents 3.27 for the same period of 2019.
This decrease came as a result of the Group’s allocating of a significant increase in precautionary provisions to offset the expected damages resulting from the negative economic impact of the COVID-19 pandemic on the businesses of the Group and its unites. These provisions increased by 345% to reach US$ 127 million during the first half of 2020 compared to with US$ 28 million in the first half of 2019.
The Group’s total operating income increased by 25% during the first half of 2020 to US$ 553 million, compared to US$ 442 million during the first half of 2019. As a positive result of the Group’s ability to control expenses, net operating income increased by 62% to US$ 275 million during the first half of the year 2020 compared to US$ 170 million for the same period last year.
With regards to the statement of financial positions’ items, the equity attributable to the parent’s shareholders and Sukuk holders amounted to US$ 1.38 billion by end of June 2020 compared to US$ 1.47 billion by the end of December 2019, reflecting a decline of 6% due to foreign currency translation reserve, payment of cash dividends and payment of Tier 1 profits during the year. Total equity reached to US$ 2.16 billion by end of June 2020 compared to US$ 2.32 billion by end of December 2019, showing a decrease of 7%, due to the same reason.
Total assets of the Group showed a decrease of 1% by end of June 2020 to reach US$ 26.13 billion compared to US$ 26.26 billion by the end of December 2019. The Group focus during the first half of 2020 on maintaining a large portion of these assets in the form of liquid assets in order to face any emergency requirements of the units because of the COVID-19 pandemic.
Operating assets (financing and investments) amounted to US$ 20.43 billion as at the end of June 2020, compared to US$ 19.75 billion at the end of December 2019, increasing by 3%. Customer accounts including due to banks and financial institutions as at the end of June 2020 reached US$ 22.23 billion, a decrease of 1% compared to US$ 22.46 billion level at the end of December 2019, and represents 85% of total assets, which indicates the continued customer confidence and loyalty in the Group and the growing customer base.
“Because of our commitment to present the model of true participatory banking through our units deployed in 17 countries, we have been able, thanks to God, to face the widespread repercussions of the Corona pandemic that has swept the world since the beginning of this year, and has resulted in severe human, social and economic damage,” Abdullah Saleh Kamel, the Chairman of the Board of Directors of Al Baraka Banking Group, said.
“We have worked closely and together with our customers, individuals, companies and governments in these countries to alleviate these repercussions by taking a number of precautionary operational and financial initiatives, which, thanks to God, resulted in the good results achieved during the first half of this year. We ask the Almighty God to preserve our societies and our peoples. We also wish to stress on this occasion our full commitment to adhere to the approach of the founder of the Group, the late Sheikh Saleh Abdullah Kamel, may God have mercy on him, in embodying the Islamic participatory banking in all forms of financing and investment provided by the Group.”
“We witnessed during the first half of this year unprecedented challenges that the world has not witnessed for a long time, which was represented by the outbreak of the COVID-19 pandemic in all countries of the world, resulted in wide damages and negative results across the various sectors, professions, institutions and societies, including banks and financial institutions. Based on our philosophy and model of socially responsible businesses, we have initiated a comprehensive strategy that do not only focus on maintaining the integrity of our financial conditions during the pandemic only, but also provides the required support to the societies in which we operate, and individuals, institutions and companies that deal with us, and at the same time maintain the sustainability of our services and the safety and protection of our employees,” Adnan Ahmed Yousif, member of the Board of Directors and President and Chief Executive of Al Baraka Banking Group, said.
“All these efforts have resulted in achieving good results during the first half of this year, thanks to God Almighty, thanks to the Islamic banking model that we adhere to, the exceptional efforts made by boards of directors, executive managements, and employees in the Group and units, the solidarity and support of our customers, and the prudent policies pursued by the central banks and governments in the countries in which we operate, so we extend our many thanks and praise to all of them.”
“Since the beginning of the outbreak of the Corona pandemic, we have initiated at the Group and units levels the activation of our business continuity plans, which have included many precautionary health, operational and financial initiatives in order to protect our customers, employees, and provide support to customers, while monitoring our financing and investment portfolios, communicating with the potential customers, maintaining appropriate liquid balances in anticipation of facing all eventualities, and enhancing security of data, information and technical services network.”
“The pandemic imposed on institutions and banks to provide their services remotely, and ABG, thanks to God, proved the success of its strategies in the transition towards the digital banking that we launched two years ago, where we, at the Group and units levels, took the initiative to transform our electronic networks into integrated platforms to provide all the banking services needed by customers and other stakeholders. This has contributed greatly to providing security and safety for our customers and employees, and in the continuity of providing our banking services in an outstanding manner.”
“Environmental protection aspects also had a large part of our efforts during the first half of the year, especially those related to fighting the Corona virus, and directing our operations and funding towards supporting environmental projects and green banking in the societies in which we operate.”
At the end of last April, S&P Global Rating updated the long-term rating of Al Baraka Banking Group to “BB-“, with a “stable” outlook, emphasizing the Bank’s short term “B” / rating. The stable view of the Group, according to the agency, reflects the strong record of managing the Group in overcoming challenging business environments. “
“During the second half of the year, we will continue to maintain our balance and capabilities in dealing with the ongoing repercussions of the Corona pandemic by continuing to reinforce and develop the initiatives and strategies that we launched since the beginning of the year, hoping that we will conclude the year with good results that are consistent with our expectations and aspirations,” Mr. Adnan added.
Adnan concluded his statement by mercy on the soul of the deceased Sheikh Saleh Abdullah Kamel, the founder of the Group, may God have mercy on him, whose principles and values will remain before us illuminating the path of the future. We also welcome the new board of directors of the Group headed by Mr. Abdullah Saleh Kamel, wishing them all success in leading the Group towards continues achieving outstanding successes.
