Arab Bank Group reports $195.3 million profit, 12% cash dividends
TDT | Manama
The Daily Tribune – www.newsofbahrain.com
Arab Bank Group reported a net income after tax of $195.3 million for 2020, as compared to $846.5 m in 2019, recording a drop of 77%.
The drop in profits was attributed to the build-up of higher provisions, driven by the deterioration of the macro-economic environment regionally and globally, and to lower revenues from interest and fee income due to the Covid-19 pandemic and to lower market interest rates and weakening oil prices.
The Board also recommended a 12% cash dividends for the financial year 2020. Group equity grew to reach $9.4 billion.
The bank said that year 2020 was challenging for the global and regional banking sectors due to economic contraction, higher cost of risk, and lower interest rates in addition to the plunge in oil prices since the outbreak of the pandemic.
Group net operating income is $ 1,007 m, 25% lower than the prior period as a result of a decrease in net interest and commission income, and the drop in the contribution of the bank’s associates in the Gulf.
Customer deposits grew by 7% to reach $ 38.7 bn as compared to $ 36.2 bn, while loans grew by 1% to reach $26.5 bn as compared $ 26.1 bn. Sabih Masri, Chairman of the Board of Directors remarked that the Covid-19 pandemic has had a material impact on businesses around the world and the economic environments in which they operate.
In an effort on safeguard, their economies, governments and regulatory authorities launched various programmes to mitigate the impact of the crisis.
He added that the bank dealt with these challenges while maintaining its strong liquidity and capital positions. Nemeh Sabbagh, Chief Executive Officer, stated that the Group took several strategic initiatives to help mitigate these unprecedented economic and market conditions, safeguarding its healthy liquidity and capital ratios, maintaining resilient asset quality metrics, and scaling up digital banking initiatives and channels across the Group.
Arab Bank Group said it has also donated $25 m as part of its social responsibility in support of national efforts to combat the COVID-19 crisis and to mitigate its health, economic and social repercussions on citizens.
Masri said that while the negative impact of the pandemic is unprecedented, its effect on the Group is well cushioned by the bank’s resilience, the strength of its franchise, and the success of its diversified business model.