ABG announces Q1 net income of $38 million

Manama: Al Baraka Banking Group B.S.C (ABG) yesterday announced that its achieved a substantial increase in total operating income of 16 per cent, and net profits before tax and provisions by 13pc during the first quarter of 2016 as compared to the same period in 2015.

Total operating income reached US$276 million in the first quarter of 2016 compared to US$238m during the same period of 2015, an increase of 16pc. Net operating income increased by 13pc from US$101m to US$114m during the same period, despite the large increase of 18pc in operating expenses due to expansion in branch network.

After deducting taxes, which rose compared with last year due to some recoveries relating to past periods which were not repeated this year, as well as provisions due to the precautionary measures taken due to general economic conditions, the Group was able to achieve a net income attributable to equity holders of the parent of US$38m which was lower than the profit achieved during the first quarter of 2015 amounting of US$40m by 5pc. Moreover, the Group was able to achieve a total net income of US$69m, the same level of total net income achieved during the first quarter of 2015. The profits growth rate was affected also by the decline in economic activity in some countries in which the Group operates as a result of lower oil prices, as well as the appreciation of the dollar value against their currencies.

The total assets of the Group as at the end of March 2016 maintained its same level of December 2015 and reached US$ 24.5 billion. The Group maintained a large portion of these assets in the form of liquid assets in order to seize the financing opportunities and to face the fluctuations in the markets, as liquidity ratio (liquid assets to total assets ratio) reached 23pc at the end of March 2016.

Sheikh Saleh Abdullah Kamel, Chairman of Al Baraka Banking Group, said the Group continued its successful performance as evident by its ability to maintain its high quality of assets and strength of liquid assets, in addition to improve financial returns from all core businesses and at the same time keep up with its socially responsible Islamic banking model.

For his part, Abdulla Ammar Al Saudi, Vice Chairman of ABG, said: “The Group and its subordinate units are in a privileged position to take advantage of the large market opportunities generated by the need to finance development programs. They were able to overcome all the adverse financial and economic developments and continued expansion of branches and financing products programs, as well as serving further their communities.

With regard to the Group’s plans to expand its branch network, Adnan Ahmed Yousif, Member of the Board of Directors and President & Chief Executive of Al Baraka Banking Group said: “We opened 20 new branches in the first quarter of 2016 to bring total branches to 607 branches with total staff of 11,458 at the end of December 2015. This reflects the clear role of our units in creating rewarding jobs to citizens in their communities.  In addition, this policy is one of main pillars of growth in businesses and profits in the Group.”

“In terms of Arabic and international geographical expansion, and after obtaining the official approval to establish a banking unit in Morocco, we are working now to complete the establishment procedures, and we hope to launch it soon.”

Looking ahead, the President & Chief Executive of the Group added, “For the remaining part of 2016, we expect the fluctuations in regional and international markets will continue, which creates difficult business environment for international banks, but we will continue our precious policy and investment of our large financial and technical resources in addition to wide geographical network of the units of the Group towards maximizing the returns for our shareholders and the investors in the Group.”