MANAMA: BBK has reported a net profit of BD14.3 million for the quarter ended March 2021 when compared with BD17.1m for the same period in the previous year, representing a decrease of 16.4 per cent.
The basic and diluted earnings per share were 10 fils compared to 12 fils during the corresponding period last year.
Total comprehensive income for the three months amounted to BD18.5m compared to total comprehensive loss of BD140.8m during the corresponding period last year.
The increase in total comprehensive income is attributable to the increase in valuation of investment securities as financial markets continued to recover from the sharp drop experienced during the first quarter (Q1) of 2020.
The drop in net profit is mainly related to decrease in net fees and commission income by 42.9pc from BD6.3m reported during Q1-2020 to BD3.6m achieved during Q1-2021, mainly due to the impact of new regulatory caps on fees and charges that came into effect around mid-2020 on retail and credit card business.
In addition, the bank’s share of profit from associated companies and joint ventures declined from a profit of BD0.8m during Q1-2020 to a loss of BD1.4m during Q1-2021, largely due to the adverse impact of the pandemic on the financial performance of the bank’s associates and joint ventures.
Investment and other income increased by 31.8pc from BD4.4m to BD5.8m during Q1-2021 due to the strong rebound in financial markets.
Net interest income was only marginally lower at BD20.9m (BD21m in Q1-2020) despite the frequent and substantial interest rate drops last year, demonstrating the resilience and flexibility of the business model and the exceptional ability to adapt and digest unpredicted operating environment changes.
In addition, the bank continued to take vigorous measures to optimise operating costs, which in turn helped to effectively decrease operating costs by 10.9pc to BD14.7m (BD16.5m in Q1-2020) despite continued investment in digitalisation and other strategic initiatives.
Total shareholders’ equity as of end-March 2021 stood marginally lower at BD501.1m when compared with BD511.8m as of end-December 2020, mainly due to the cash dividend declaration to shareholders during Q1-2021.
Total assets by end-March 2021 reached BD3,741.8m compared to BD3,760.4m as of the 2020-end, a marginal decrease of 0.5pc.
Treasury bills decreased 29.1pc to BD345.8m compared to BD487.8m as of end-December 2020.
Investments in associated companies and joint ventures stood at BD63m as of end-March 2021 (end-2020: BD65.5m).
On the other hand, cash and balances with central banks increased by 38.5pc to BD355.2m compared to BD256.5m as of end-2020, reflecting robust liquidity position of the bank during unstable business environments.
In addition, the investment portfolio increased by 1.2pc to BD969.2m compared to BD957.3m as of end-December 2020, also net loans and advances registered a slight increase of 0.6pc to BD1,565.2m compared to BD1,555.8m as of end-2020.
Total customer deposits increased by 1.1pc to BD2,192.1m (end-2020: BD2,167.4m), while loans to customer deposits ratio remained at 71.4pc (end-2020: 71.8pc).
The board of directors said: “BBK continues to put in place measures to optimise operations and improve financial resilience in response to the pandemic and the unprecedented economic environment, and this has been reflected in the financial results. Despite all the challenges and the drop in profitability across the banking sector, we are delighted to continue to provide attractive returns to shareholders. We look forward to the future with optimism and we are confident that with solid fundamentals, support of shareholders, loyalty of customers, and dedication of the management and employees we will emerge from this crisis stronger.”
BBK Group chief executive Dr AbdulRahman Saif said: “The challenges posed by the pandemic continued to adversely impact the banking sector. We adopted measures to enhance resilience and efficiency, while supporting employees, customers and communities, to alleviate the negative impact. Such measures, coupled with solid cost and risk discipline and exceptional client relationship management, enabled us to continue generating attractive returns for shareholders, and preserve a robust capital and liquidity position for future success.”
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