MANAMA: Bank ABC has reported consolidated net profit for the first nine months of 2019 of $161 million on a headline basis, an increase of one per cent compared with $159m reported for the same period last year.
On an underlying basis, after adjusting for exceptional one-off items, net profit grew by 7pc, after absorbing the FX impact on the pre-provision net income and reduced impairment provisions.
Headline profit before taxation was $203m, 14pc higher compared with $178m reported in the same period of 2018, although this normalises to a 6pc decline, after adjusting for the effect of foreign currency hedging transactions in Banco ABC Brasil, which have an offsetting tax charge impact.
However, after adjusting for one-off items and FX impact, underlying profit before taxation remained in line with the same period last year.
On a headline basis, total operating income was $633m, 7pc higher against $592m reported for the same period last year and neutralises year-on-year.
Adjusting for FX impact and the one-off items, the underlying total operating income grew by 3pc demonstrating traction in the strategy despite volatile market conditions during the period.
Net interest income was $421m, 1pc higher against $417m reported for the same period last year, after absorbing the impact of declining interest rates.
Operating expenses were at $384m, $32m or 9pc higher than the same period of last year, due to inflation and flow through effect of continuing investments into strategic initiatives and in line with our expectations.
Impairment charges were at $46m compared with the $62m reported for the same period last year reflecting proactive credit management and conservative underwriting practices.
Ratio of impaired loans to gross loans at 3.7pc improved from the 2018 year-end levels of 4pc, but normalises to 2.8pc, when long-standing legacy fully provided loans are adjusted for. Provisions coverage against the aggregate impaired exposures remained comfortable at 106pc.
Tax charge is $9m, compared with tax credit (saving) of $19m for the same period of the previous year (the variance largely arising from the tax treatment of currency hedges in BAB noted above).
On a normalised basis tax charge for the period was $30m compared with $41m for the same period last year.
Earnings per share remained steady at $0.05, similar to the same period in the previous year.
Total comprehensive income was $176m compared with $24m reported for the same period of 2018, reflecting healthy net profit levels and favourable movements in foreign currency translation and fair value movement in debt instruments.
Consolidated net profit for the third quarter was $49m, 7pc higher compared with $46m reported for the same period last year.
Adjusting for exceptional one-off items, third quarter performance was 4pc higher compared with last year.
The quarter reflected similar trends as the nine-month period.
Profit before taxation on a headline basis was $44m, compared with $59m reported for the third quarter of 2018, and normalises to a 4pc decline.
On a headline basis, total operating income was $196m, 3pc lower against $203m reported for the same period last year, and normalises to 3pc increase after adjustments.
Net interest income was $142m, 1pc higher against $140m reported for the same period last year.
Operating expenses were $127m, $15m or 13pc higher than the same period of last year due to reasons explained above.
Impairment charges were at $25m compared with the $32m reported for the same period last year reflecting proactive and conservative credit management.
Tax credit (saving) was $15m, compared with tax charge of $1m for the same period last year (the variance largely arising from the tax treatment of currency hedges in BAB).
Earnings per share remained at $0.02, compared with $0.01.
Total comprehensive income was $17m compared with $38m reported for the same period of 2018, reflecting the sum of net profit and fair value movement in debt instruments offset by unfavourable movements in foreign currency translation during the quarter.
Total assets stood at $29.1 billion as of end-September 2019, compared with $29.5bn at the 2018 year-end.
Loans and advances grew during the period to $15.2bn, after absorbing FX impact, reflecting emphasis on prudent use of balance sheet.
Deposits at the end of the period were $20.1bn, compared with $20.7bn at 2018 year-end.
Equity at the end of the period was $3,945m, 2pc higher compared with $3,862m at 2018 year-end.
Liquidity ratios remain strong with LCR and NSFR on a Basel III basis exceeding 100pc with comfortable buffer and liquid assets to deposits ratio healthy at 54pc.
Capital ratios too are strong, with tier 1 at 17.1pc and total capital adequacy ratio (CAR) at 18.1pc.
Bank ABC Group chairman Saddek El Kaber said there was a sharp change in the market conditions during the year with lower interest rate and economic growth environments combined with political uncertainties in some key markets.
“Adjusting for the effects of foreign currency depreciation and one-off items last year, the group is growing year-on-year, without compromising its strong balance sheet and conservative credit risk approach. The group recognises the significant uncertainties and challenges that the immediate future environment poses and is adequately positioning itself to steer through these as has been done in the past,” he added.
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