Bank ABC (Arab Banking Corporation) has reported continued strong performance in the first half of the year, driven by diversified business growth and benefitting from a rising interest rate environment.
The bank's total operating income grew by 18 per cent year-on-year (YoY), whilst total assets crossed $40 billion for the first time in its history.
Capital and liquidity ratios remained at strong levels. The bank has recorded a 72pc increase YoY in net profit to $121 million.
During this period, the bank also won a number of distinguished awards recognising its innovation and digitisation initiatives.
Global Finance's 'The Innovators Awards 2023' named the bank's ABC Labs as one of 'the World's Best Financial Innovation Labs', a recognition given to institutions leading the digital revolution in the global banking industry.
Bank ABC has also been presented with the 'Top Innovations in Finance' award by Global Finance, an accolade that underscores the bank's 'Digital Transformation Programme' for delivering an unparalleled, personalised banking experience to corporates and individuals.
Bank ABC Group chairman Saddek El Kaber remarked, "We are extremely pleased with the group's excellent growth in profits during the first half of 2023. Our balance sheet remains healthy and strong. We look forward to continuing this great momentum during the rest of the year as we steadily progress on our strategic journey to build our 'bank of the future'.
Consolidated net profit for the second quarter of 2023 was $61m, 56pc higher compared to $39m reported for the same period last year.
Earnings per share for the period were $0.02 compared to $0.01 in the same period last year.
Total comprehensive income was a profit of $110m compared to a loss of $111m, reported for the same period last year.
Last year, the bank was impacted by change in fair valuations of the bank's bond portfolio and net impact of foreign exchange translation in foreign subsidiaries.
These were relatively muted in the current period with the strengthening of the Brazilian Real, to some extent counterbalanced by the depreciation of the Egyptian pound against the US dollar.
Total operating income was $312m, 14pc higher compared to $273m reported for the same period last year, benefitting from core underlying business growth and higher interest rates.
Operating expenses were $190m, 10pc higher than $172m for the same period last year, from a combination of expenses incurred for supporting business growth, strategic transformation initiatives and general inflationary increases.
The group continues to enforce appropriate cost discipline without compromising on investment into its digital transformation and strategic initiatives.
Impairment charges (ECL) or credit loss expenses for the quarter were $30m compared to $26m reported for the same period last year, reflecting the quality of the group's asset portfolio and broadly in line with its historic credit loss experience.
Tax charge for the quarter was $17m, compared to $22m for the same period last year, which is in line with profit before tax in the overseas subsidiaries.
Consolidated net profit for the first six months of 2023 was $121m, a growth of 72pc compared to $70m reported for the same period last year.
Earnings per share for the period were $0.04, compared to $0.02 in the same period last year.
Total comprehensive income was a positive $109m, compared to a loss of $103m reported in 2022.
Total operating income was $611m, 18pc higher compared to $520m reported during the same period last year.
Operating expenses at $364m were higher by 10pc compared to $331m, during the same period last year, resulting from a combination of strategic investments and transformation initiatives, supporting business growth and general inflationary increases.
The group therefore has positive income/cost 'jaws' of 8pc with a consequent improvement in the cost/income ratio.
Bank ABC remains focused on disciplined cost control while continuing investments into the strategic digital initiatives to build the 'bank of the future'.
Equity at the end of the period was $4,153m, compared to $4,095m reported at the 2022 year-end, after absorbing the impact of dividend payment and FX translation on equity in subsidiaries.
Total assets crossed the $40 billion mark for the first time in the group's history. Total assets stood at $41bn at the end of the period, as compared to $36.6bn at the 2022 year-end, an increase of 12pc driven by business growth and portfolio management actions.
Liquidity ratios were strong with LCR and NSFR at 317pc and 123pc respectively and liquid assets to deposits ratio healthy at 51pc.
The group's capital ratios too were strong, with Tier 1 at 15.2pc comprising predominantly CET1 at 13.6pc and total Capital Adequacy Ratio (CAR) at 16.3pc.
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