MANAMA: Ithmaar Bank B.S.C. (Closed), a Bahrain-based Islamic retail bank, reported profits for the fourth quarter of 2021 as it announced its financial results for the year ended 31 December 2021.
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 profit attributable to equity holders for the three-month period ended 31 December 2021 of BD2.11 million compared to the net loss of BD11.11 million reported for the same period in 2020. Total net profit for the three-month period ended 31 December 2020 was BD3.82 million compared to the BD10.26 million net loss reported for the same period in 2020.
Despite the profit for the quarter results, the Bank reported a net loss attributable to equity holders for the year ended 31 December 2021 of BD0.51 million, a 97 percent reduction compared to the net loss of BD15.29 million reported for 2020. Total net profit for the year ended 31 December 2021 is BD5.16 million compared to the net loss of BD10.97 million reported for 2020. This improvement, with a significant reduction in losses, is due mainly to the gradual economic recovery in 2021 from the effects of the global Covid-19 pandemic resulting from lower impairment provisions compared to previous year.
“On behalf of the Ithmaar Bank Board of Directors, I am pleased to report that Ithmaar Bank’s commitment to focus on its core Islamic banking business has borne fruit, effectively turning the Bank’s financial performance around,” said HRH Prince Amr. “This helps set the stage for the next chapter in the Bank’s evolution and perfectly positions us to best capitalise on the challenges and opportunities that lie ahead,” he said.
In January 2022, Ithmaar Bank’s parent company, Ithmaar Holding, and Al Salam Bank announced agreement on the acquisition by Al Salam Bank of the consumer banking business of Ithmaar Bank in Bahrain as well as Ithmaar Holdings’ ownership stake in both BBK and Solidarity Group Holding. The announcement followed the execution of a memorandum of understanding between the two entities in October 2021, and the transaction remains subject to the approval of Ithmaar Holding shareholders and the signing of definitive agreements. Following the transaction, Ithmaar Bank will remain a wholly-owned subsidiary of Ithmaar Holding and continue its journey as an innovative and agile Sharia compliant banking institution, maintaining its banking operations as a licensed Islamic bank regulated by the Central Bank of Bahrain and focusing on corporate banking and related services.
Ithmaar Bank Chief Executive Officer, Ahmed Abdul Rahim said the year-end financial results show that the Bank’s efforts to continuously grow closer to its customers and enhance their Islamic banking experience had paid off.
“The results show that the group’s share of income from unrestricted investment accounts as a Mudarib increased to BD18.01 million for the three-month period ended 31 December 2021, a 117 percent increase compared to BD8.29 million for the same period in 2020. This contributed to increasing the group’s share of income from unrestricted investment accounts as a Mudarib to BD53.48 million for the year ended 31 December 2021, a 49 percent increase compared to BD35.95 million for 2020,” said Abdul Rahim. “This increase is mainly due to the increase in the Islamic financing portfolio of Faysal Bank Limited (FBL), our subsidiary in Pakistan, and a testimony for our strong core income potential,” he said.
