MANAMA: Bank ABC Islamic has reported net profit of $22.3 million for the nine months ended September 30, 2020.
The bank said in a statement that Covid 19 continues to impact most of its clients across different geographies.
The pandemic combined with low profit rate environment and depressed oil price resulted in an overall slowdown of business momentum, particularly in the corporate sector.
However, the bank remained active in the institutional and sovereign space during the year and successfully led 8 sukuk mandates and 2 syndications.
Bank ABC Islamic’s top line performance has been satisfactory with 2pc growth on a year-on-year basis in total operating income.
Net profit for the period was lower at $22.3m as compared to $28.9m during same period last year mainly on account of higher ECL (Expected Credit Losses).
The increase in ECL during this period was a combination of a specific provision related to a client fraud in UAE combined with forward looking FAS 30 ECL charge.
In making estimates for the latter, the group and the bank have stress tested the macroeconomic factors conservatively in the ECL model.
Net profit for the third quarter was $7.9m compared with $9.9m reported in the third quarter of last year.
Total operating income was $11.9m compared with $12.3m for the same period of last year.
Operating expenses were $1.4m, compared with $1.8m for the same period of last year. Impairment charges for the period were $2.5m compared with $0.5m reported during last year.
Net profit for the first nine months was $22.3m compared with $28.9m reported in the first nine months of last year.
Total operating income rose to $35.3m, 2pc higher compared with $34.6m last year. Operating expenses were $5m compared with $5.6m for the same period of last year.
Impairment charges for the period were $7.6m compared with a write back of $0.2m reported during last year.
Total assets stood at $2.152 billion as of September 30, 2020 compared with $2.079 billion at end-2019.
Shareholders’ equity as of September 30, 2020 stood at $287m compared with $365m at end-2019.
The decrease is mainly due to $100m dividend payment to the shareholders made during the period.
The capital base remains strong with a capital adequacy ratio of 33.5pc, predominantly Tier 1, which totalled 32.5pc.
Commenting, Bank ABC Islamic managing director Hammad Hassan said, “We are pleased with our performance against the backdrop of the pandemic and market uncertainties that we are facing. We witnessed some recovery this third quarter which we capitalised upon.”
Mr Hassan
“We will continue our focus on asset quality and reducing cost to face the lasting impact of these extreme market conditions.”
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