MANAMA: Bank ABC Islamic has announced its results for the nine months ended September 30, 2021.
After the one-off impact of fraud-related impairments in 2020, the bank has rebounded with significant improvement in net profitability, 19.4 per cent higher than the same period last year.
The asset quality remained strong with no significant account specific impairments.
The bank continues to support the Group in Islamic Banking initiatives with a strong start of Islamic banking in Algeria this year, under the brand name, ‘alburaq’ that caters to corporate, SME and retail segments.
Net profit for the third quarter was $7.5 million compared with $7.9m reported in the third quarter of last year.
Total operating income was $9.7m compared with $11.9m for the same period of last year.
Allowances for credit losses for the period were $0.4m compared with $2.5m reported during the same period last year.
Operating expenses were $1.8m, compared with $1.4m for the same period of last year.
Net profit of $26.7m for the nine month period at 19.4pc higher than the same period last year, reflects the bank’s return to normal performance after the one-off exceptional impairment in 2020.
Total operating income of $31.2m, 11.5pc lower than the same period last year, is mainly on account of, (a) consistently lower profit rate environment during 2021; and (b) lower fee income in 2021 due to subdued markets activity impacting our capital markets businesses.
Otherwise, the core wholesale banking business performance was almost 95pc of the year’s target.
Total operating expenses were 2.6pc higher than last year’s level of $5m, mainly related to staff costs, as the pandemic-related subsidies provided by the government in 2020 were discontinued in 2021.
Total assets stood at $1.701 billion as of September 30, 2021 compared with $2.314bn at end-2020.
The drop in assets is mainly attributable to excess liquidity in the market and subdued new business activity due to the pandemic.
Both factors contributed in lower asset utilisation by clients and large repayments in some cases.
Shareholders’ equity at September 30, 2021 stood at $294m, compared with $293m at end-2020.
Capital adequacy ratio remains very strong at 43.2pc, predominantly tier 1, which totalled 42.2pc.
Hammad Hassan, managing director of Bank ABC Islamic, said, “We are pleased with the overall performance of the bank in the nine month period, despite the impact on top line due to a combination of factors including lower profit rate environment, reduced capital markets activity and lower asset utilisations. However, with the rebound in most businesses as the impact of the pandemic reduces, we are optimistic on recovery of core business lines and expect to close the year on a strong footing.”
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