MANAMA: Bank ABC has reported its results for the first quarter of 2021, with a return to net profit of $30 million, as the cost of risk returned to pre-pandemic levels, reflecting better economic outlook, after the bank absorbed the impact of regional fraud events experienced in 2020.
The group started the year on a solid and profitable footing, recovering from the impact of 2020 and carefully navigating post-Covid-19 transitional operating conditions, still characterised by episodical lockdowns and a constrained work environment across markets. Bank ABC continues to support its clients, staff and communities on the path to recovery whilst pursuing its growth and digital transformation plans.
Total operating income significantly increased on a headline basis, and on an underlying basis in line with previous year’s levels, despite lower interest rates and the challenged economic conditions.
Costs remain lower than prior year, comparatives reflecting rationalisation actions, greater discipline and cost control while continuing investment into our strategic priorities on transforming the bank.
Balance sheet remains strong with capital and liquidity ratios well above the regulatory requirements: Group CET 1 Ratio is 16.6 per cent, LCR 200pc and NSFR 124pc.
The bank’s payment and digital retail banking capabilities gained steady traction.
A new management team have taken over in Arab Financial Services to steer the next phase of its transformation. ila Bank’s customers and deposits have been growing from strength-to-strength.
Overall asset portfolio quality remains solid with sound credit underwriting standards evidenced by client-level stress-testing reviews.
Bank ABC’s group chairman Sadek El Kaber commented, “We are pleased to see the group’s return to a more usual level of profitability, reaffirming the strong underlying fundamentals of the diversified franchise. Despite a more challenging transition from the pandemic than previously expected, Bank ABC continues to operate strongly, adapting to the ‘new normal’ and steering effectively through this prolonged challenge.”
Consolidated net profit for the first quarter of 2021 was $30m, compared with a net loss of $62m reported for the same period last year.
Earnings per share for the period was $0.01, compared with negative $0.02 for the same period last year.
Total assets stood at $30.2 billion at the end of the period, 1pc lower compared with $30.4bn at the 2020 year-end. On an underlying basis, total assets grew by 2pc.
Loans and advances stood at $15.2bn compared with levels of $15.7bn at 2020 year-end reflecting a continuing emphasis on prudent use of balance sheet.
Deposits were $21.6bn, compared with $21.3bn at 2020 year-end. Despite the prevailing conditions, the deposit experience remained steady underscoring the confidence of clients.
The bank’s efforts to diversify and improve the quality of deposit base continue.
Liquidity ratios are strong with LCR and NSFR at 200pc and 124pc respectively with comfortable buffer and liquid assets to deposits ratio healthy at 53pc improved from 52pc at 2020 year-end.
Capital ratios are strong: CET1 at 16.6pc, tier 1 at 16.9pc and total capital adequacy ratio at 17.8pc.
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