MANAMA: Bank ABC (formerly known as Arab Banking Corporation) has announced its consolidated net profit for the first half of the year was $102 million.
These results compare positively with the net profit of $101m reported for the same period last year, benefiting from strong performance in all core businesses.
Net profit for the second quarter ended June was $52m, 13pc lower than $60m reported for the same period last year, to some extent impacted by higher impairment provisions.
Total operating income was $432m, broadly in line with $442m reported in the first half of last year.
Operating expenses at $224m were slightly higher than last year, mainly impacted from currency translation as well as flow through costs on investments in the previous year.
Net impairment provisions for the six-month period ended June at $50m, were higher than the previous year’s $36m.
The increase was primarily from the bank’s Brazilian subsidiary, Banco ABC Brasil, which continues to be impacted by some flow through from the recessionary conditions of the Brazilian economy, although the charge remains in line with expectations for the period and is significantly lower than Brazilian peer banks.
Conversely, the ratio of non-performing loans to gross loans remained at 2016 year-end levels of 4.1pc.
The tax charge was at $26m, compared with the charge of $71m for the same period last year, the variance largely arising from the tax treatment of currency hedges.
Bank ABC Group’s total assets stood at $29.2 billion at the end of first half, comparable with $30.1bn at the 2016 year-end.
The bank continues to prioritise asset quality and return, whilst maintaining liquidity and capital strength. Deposits at the end of the period were $21.3bn as against $20.2bn at 2016 year-end.
The liquidity position continues to be at comfortable levels with the liquid assets to deposits ratio at 63pc, lower than the 68pc at the year-end 2016 reflecting the increase in deposits.
Shareholders’ equity at end-June stood at $3,848m after the distribution of 3pc dividend to shareholders.
Consolidated total capital adequacy ratio remained strong at 19.2pc, comprising predominantly Tier 1 at 18pc.
“The results are steady and in line with our expectations,” said Bank ABC’s group chairman Saddek Omar El Kaber.
“This is a positive sign and a testament to our diversified businesses. Whilst market conditions in Brasil continue to be challenged, our operations in Brasil has shown resilience and our core businesses in other countries have performed well. Our proactive risk and balance sheet management is bearing fruits, with our key health indicators measuring exceptionally well against international standards.”
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