MANAMA: Bank ABC has announced consolidated net profit, attributable to the shareholders of the parent, for the first quarter of 2018 was $53 million, six per cent higher when compared with $50m reported for the same period last year.
Earnings per share for the quarter remained steady at $0.02, similar to the first quarter of the previous year.
On a headline basis, total operating income was $211m, 8pc lower than the $229m reported for the first quarter last year.
After adjusting for the effects of foreign currency hedging transactions in Banco ABC Brazil (BAB), which have an offsetting tax charge impact, and other one-off non-core items, the total operating income showed a 4pc year-on-year growth benefiting from both improving interest rates and stabilising market conditions.
Out of the total operating income, net interest income was $138m, 3pc higher when compared with $134m during the first quarter of 2017.
Operating expenses were $119m, $7m higher than the same period last year, due to inflation and continuing investment costs.
Impairment charges for the quarter were $12m compared with the previous year’s $29m, particularly indicating improving market conditions in Brazil and a relatively benign Q1 experience in the group’s wholesale and Mena businesses.
Impairment for the quarter is now computed on IFRS 9 basis covering the entire portfolio.
Ratio of non-performing loans to gross loans at 3.7pc compared with 2017 year-end levels of 3.5pc, and normalises to 2.8pc, when legacy fully provided loans are adjusted for.
Tax charge was $14m, compared with $23m for the first quarter of 2017 (the variance largely arising from the tax treatment of currency hedges in BAB).
Total assets stood at $28.9 billion at the end of the first quarter of 2018, comparable with $29.5bn at the 2017 year-end, with loans and advances growing to $15.4bn, as the group continued to prioritise asset quality and returns.
Deposits at the end of the quarter were $20bn compared with 2017 year-end deposits of $20.2bn.
In particular, customer deposits increased by $182m during the period, resulting from focus on diversifying the deposit composition.
Shareholders’ equity at end-March 2018 stood at $3,857m after the distribution of 3pc dividend to shareholders compared with $3,930m at 2017 year-end.
Liquidity ratios were 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 were strong, with tier 1 accounting for 17pc and total capital adequacy ratio was 18.3pc.
Bank ABC Group chairman Saddek Omar El Kaber said, “We are starting the year well with improved growth in profitability year on year. Pleasingly, and as expected, credit conditions show signs of stabilising and we remain cautiously optimistic on the outlook for the full year.
“Loan growth was achieved while maintaining strong balance sheet and risk metrics, which continue to remain a key focus area, and which benchmark well against regional and international standards. Our strategic priorities on our wholesale banking transformation, our digital bank rollout and our organisational health continue to progress and underpin the improving trend on our financial performance.”
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