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Bank ABC net profit rises 6pc to $193 million

Bahrain Business
Tue, 13 Feb 2018
GDN Online Desk
1 of 2

MANAMA: Bahrain-based Bank ABC (formerly known as Arab Banking Corporation) has posted consolidated net profit of $193 million for last year as against $183m reported for the previous year, marking an increase of 6 per cent.

Net profit for fourth quarter was $42m, 27pc higher compared to $33m in Q4 2016.

On a headline basis, total operating income was $869m against $865m reported for 2016, and normalises to a 7pc growth, after adjusting for effects of foreign currency hedging transactions in Banco ABC Brazil (BAB), which have an offsetting tax charge impact.

Operating expenses for last year were $462m, higher by $26m than the previous year, due to continuing investment costs as well as some currency translation impact.

Impairment charges for the year were $96m compared with the previous year’s $92m, resulting from the after impact of recessionary conditions in Brazil although these have been stabilising more recently.

Ratio of non-performing loans to gross loans at 3.5pc improved from 2016 year-end levels of 4.1pc, and normalises to 2.6pc, when adjusted for fully provided legacy loans.

There bank had a tax charge of $58m last year, as against $103m for 2016 (the variance largely arising from the tax treatment of currency hedges in BAB).

The board of directors has recommended a cash dividend distribution of 3pc of issued share capital amounting to $93.3m and translating to approximately 48pc of net profit for the year.

The dividend is subject to approval of shareholders at the bank’s annual general meeting scheduled for March 25.

Bank ABC’s Group chairman Saddek Omar El Kaber said: “We are pleased to see the continuing progress of the group with improved growth in profitability of 6pc year-on-year. This year also saw the expansion of our network footprint to Dubai and Singapore as new branches were opened, underpinning our strategic intent to be Mena’s leading international bank.

“In addition, we are making advances with our digital transformation in a number of areas. We are cautiously optimistic on the positive signals emerging in many of our core markets, which should build momentum into our businesses. Our balance sheet and risk metrics continue to remain one of our key focus areas and benchmark well against regional and international standards.”

Bank ABC is a leading player in the region’s banking industry and provides innovative wholesale financial products and services that include corporate banking, trade finance, project and structured finance, syndications, treasury products and Islamic banking.

It also provides retail banking services through its network of retail banks in Jordan, Egypt, Tunisia and Algeria.

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