Bank ABC swings to profit

TDT | Manama

The Daily Tribune – www.newsofbahrain.com

Bank ABC (Arab Banking Corporation) has swung to a profit in the second quarter and half year 2021, which the group thanked for the exceedingly good performances of its businesses, despite the current conditions. ABC said it continues to recover well from the impact of 2020, improving profitability in the first half of 2021. “We are carefully navigating ongoing constrained post-pandemic operating conditions across our markets, supporting our clients, staff and communities while progressing our growth and digital transformation plans.” The group also said its acquisition of BLOM Bank Egypt, signed in January, reached the completion stage in August, and going forward will be a fully consolidated subsidiary within the Bank ABC Group.

Bank ABC’s Group Chairman, Saddek Omar El Kaber, commented, “Several of our businesses have performed exceedingly well under the current conditions, reaffirming the strong underlying fundamentals of the group’s diversified franchise.”

Second-quarter results

Consolidated net profit attributable to the shareholders of the parent was US$25 million, compared to a net loss of US$5 m reported for the same period last year. Earnings per share were US$0.01, compared to nil for the same period last year.

Total comprehensive income attributable to the shareholders of the parent was US$137 m, broadly at the same level compared to US$138 m reported for the same period last year. Net interest income was US$138 m, 20% higher against US$115 m reported for the same period last year, after absorbing the impact of declining interest rates compared to the same period last year supported by growing volumes in certain markets. Operating expenses were at US$128 m, 12% higher than US$114 m for the same period last year, as the Group returns to a more normal level of activity (underlying basis* 13%).

Impairment charges or credit loss expenses for the quarter were US$29 m compared to US$54 m reported for the same period last year, with stabilising economic outlook from the lows last year, and without the major impact of regional fraud events such as NMC, that created abnormally elevated ECL charges during 2020.

H1 results

Consolidated net profit attributable to the shareholders of the parent was US$55 m, compared to a net loss of US$67 m reported for the same period last year. Earnings per share was at US$0.02, compared to US$-0.02 in the previous year. Total comprehensive income attributable to the shareholders of the parent was US$121 m compared to a total comprehensive loss of US$396 m reported last year, reflecting the net profit and relatively stable markets during 1H 2021 compared to last year. Net interest income was US$260 m, 3% higher against US$252 m reported for the same period last year, after absorbing the impact of declining interest rates and FX depreciation. On an underlying basis*, net interest income was 6% higher year on year. Operating expenses were at US$253 m, 2% higher than US$247 m for the same period last year. Impairment charges (ECL) or credit loss expenses for the period were US$49 m, 72% lower than the US$174 m reported for the same period last year. Loans and Advances stood at US$15.9 billion, 1.8% higher than the US$15.7 bn reported at 2020 year-end, reflecting credit conditions and continuing prudent use of the Group’s balance sheet capacity. Deposits were at US$22.2 bn, compared to the levels of US$21.3 bn at 2020 year-end.