MANAMA: National Bank of Bahrain (NBB) yesterday reported an increase of 5.4 per cent in net profit at BD58.24 million ($154.88m) last year, compared with BD55.26m ($146.97m) in 2015.
For the fourth quarter last year, the bank’s net profit was BD12.03m ($31.99m) against BD11.9m for the corresponding period of the previous year.
The full year earnings per share improved from 48.5 fils in 2015 to 50.9 fils in 2016.
At the board of directors meeting yesterday, which saw approval of the financials, the bank’s chairman Farouk Almoayyed said the results reflect continued focus on improving performance and enhancing shareholders returns “despite difficult external conditions”.
The board has recommended cash dividend of 25pc amounting to BD28.99m. The dividend percentage is unchanged from 2015.
The board has also proposed a bonus issue of 10pc or one additional share for every 10 shares amounting to BD11.60m. The bonus issue is proposed to be made through utilisation of BD11.6m from the general reserve, which is subject to regulatory approvals.
Total cash and stock dividend payout for last year amounts to 35pc.
The bank’s total shareholders’ equity before appropriations stands at BD414.7m.
Net interest income for 2016 was BD65.99m as against BD59.52m in 2015, a growth of 10.9pc. The increase is attributable to growth in average loans and advances and better return on deployment of surplus funds.
Total other income recorded for 2016 was BD30.88m compared with BD34.88m for the previous year.
The decrease is mainly attributable to capital gain on sale of certain fixed rate investments in the previous year.
Operating expenses at BD34.09m showed an increase of 13.3pc over the previous year, reflecting a cost to income ratio of 35.2pc.
The increase in staff and other expenses is a result of investment made in human resources and technology.
As a result of prudent risk management, the impairment provision on loans and advances amounted to BD2.08m for 2016 as against BD7.74m for the previous year.
A charge of BD2.46m was made in 2016 towards impairment on equity investments due to decrease in the market value of the investments. The total balance sheet of the bank stood at BD2,977.1m as of December 31, 2016 as against BD2,999.71m as of the previous year-end.
Total earning assets stood at BD2,822.98m as on December 31, 2016 as against BD2,837.94m on December 31, 2015.
The bank has a well-diversified asset composition with strong liquidity.
Customers’ deposits stood at BD2,088.35m as on December 31, 2016 against BD2,247.02m at the previous year-end. Capital adequacy ratio remains strong at 35.4pc as of December 31, 2016 before the proposed appropriations.
Chief executive Jean-Christophe Durand said the results are the outcome of “generating revenue through efficient balance sheet management while prudentially managing risks amidst challenging business conditions”.
Mr Durand said this year is expected to offer challenges as regional economies grapple with the level of oil prices and banks come to grips with regulatory constraints and newer norms for doing business.
“However, there are signs that Bahrain’s focus on infrastructure development and implementation of several projects of national importance will largely mitigate the negative effects of a weak global and regional economic outlook.
“We are confident that NBB will be able to take advantage of these plans with our concerted effort on innovative and novel approach to existing as well as new business enterprises.
“Our strong capital base, adequate liquidity, the largest distribution network will provide the fillip to pursue our growth objectives through active deployment in the local economy and also through a concentrated focus on garnering new clients and business activities.
“We are certain that with our renewed focus and distinctive approach, we will continue to meet the expectations of our customers, both existing and new, while reassuring our shareholders of sustained progress in the years ahead,” he added.
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