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Ithmaar Bank reports 2020 financial results, continues stable, customer-centric growth

February 21, 2021
banking

Ithmaar Bank B.S.C. (Closed), a Bahrain-based Islamic retail bank, said it continues to focus on customer-centric growth and on becoming the Islamic retail bank of choice as it announced its financial results for the year ended 31 December 2020.

The announcement, by Ithmaar Bank Chairman His Royal Highness Prince Amr Al Faisal, follows the review and approval of the Board of Directors of the Bank’s consolidated financial results.

Ithmaar Bank’s financial results show a net loss attributable to equity holders for the three-month period ended 31 December 2020 of BD11.11 million compared to the net loss of BD4.02 million reported for the same period in 2019. Total net loss for the three-month period ended 31 December 2020 was BD10.26 million compared to the BD2.80 million net loss reported for 2019. The results are mainly due to prudent impairment provisions, recognized largely as a consequence of the ongoing global Covid-19 pandemic.

The quarterly results contributed to a net loss attributable to equity holders for the year ended 31 December 2020 of BD15.29 million compared to the net loss of BD1.35 million reported for 2019. Total net loss for the year ended 31 December 2020 was BD10.97 million compared to the net profit of BD2.48 million reported for 2019.

“On behalf of the Ithmaar Bank Board of Directors, I am pleased to report that, despite the unprecedented challenges of 2020, the Bank continues to demonstrate remarkable resilience and remains resolutely focused on becoming the Islamic retail bank of choice in the Kingdom of Bahrain,” said HRH Prince Amr. “As a result, the Bank continues to show stable, customer-centric growth in key areas while setting the stage for brisk growth when markets return to some sense of normalcy,” he said.

“Perhaps the clearest testimony to the Bank’s resilience and continued growth is the fact that it is reporting increased operating income for 2020, one of the most challenging years in decades,” said HRH Prince Amr. “Operating income increased by 4 percent, growing to BD87.02 million for the year ended 31 December 2020, compared to the BD83.59million reported for 2019,” he said.

“Income from unrestricted investment accounts also increased by 11 percent, growing to BD91.60 million for the year ended 31 December 2020, compared to BD82.55 million for 2019,” said HRH Prince Amr. “This growth demonstrates continued customer confidence in the Bank, despite the extraordinary market conditions of 2020,” he said.

“Ithmaar Bank’s results include significant impairment provisions, which increased by BD12.81 million in 2020 compared to their 2019 levels due the ongoing global pandemic,” said HRH Prince Amr. “Despite these prudent provisions, the Bank reported a net loss, before overseas taxation, of BD1.10 million for the year ended 31 December 2020 compared to net income of BD12.89 million reported for 2019,” he said.

In September 2020, Ithmaar Holding, Ithmaar Bank’s parent company, and the Bank of Bahrain and Kuwait (BBK), signed a Memorandum of Understanding (MoU) on the potential acquisition by BBK of Ithmaar Bank’s Bahrain operations as well as specific assets of IB Capital, a wholly-owned subsidiary of Ithmaar Holding. The plans, which are subject to due diligence by both parties, will require shareholder and regulatory approvals.

When implemented, the plans will lead to bolstering the already well established Ithmaar Bank brand and position it to better capitalize on opportunities for growth. The plans are in line with Ithmaar Holding’s strategy of creating value for its shareholders.

“Our shared vision, of the becoming the Islamic retail bank of choice, was put to test by the trials of 2020 – and I am pleased to report that, not only did we manage to continue our customer-centric growth, but we emerged stronger than before,” said Abdul Rahim. “This, in turn, helps highlight the fact that Ithmaar Bank is a growing, resilient bank, as reflected in the increased operating income, that continues to invest in the future and plays a key role in the community,” he said.

“A good reflection of customer confidence in Ithmaar Bank is the steady growth in equity of unrestricted investment accountholders by 20 percent to reach to BD1.28 billion at 31 December 2020 from BD1.06 billion in year 2019, as well as the increase in customers’ current accounts by 16 percent to reach to BD661.7 million at 31 December 2020, compared to BD572.5 million in year 2019,” said Abdul Rahim. “The Bank continued during 2020 to build on the far-reaching digital initiatives it had recently launched, including a sophisticated Customer Relationship Management (CRM) solution, an innovative Mobile Banking services application and various branch services automation and other customer-facing solutions. This is, of course, in addition to our ongoing focus on continuously developing our products and services while further enhancing our customers’ Islamic banking experience,” he said.

In October 2020, the Bank launched special financing offers for Mazaya programme beneficiaries to purchase villas at the Danaat Al Lawzi development, located at the West of Hamad Town. Similar offers were launched for the Deerat Al Oyoun development in Diyar Al Muharraq and other key developments in the Kingdom. The special financing offers are designed exclusively for beneficiaries of the Mazaya programme, the Kingdom of Bahrain’s social housing scheme that aims to help eligible Bahraini nationals buy their first homes. As part of this programme, citizens are offered government-subsidised financing to help them buy their homes.

In June 2020, despite the economic slowdown by the global Covid-19 pandemic, Ithmaar Bank announced the opening of a new branch in Hamad Town, effectively relocated the Al Hamalah branch to a new, better and more accessible location with ample parking facilities.

Earlier in 2020 year, Ithmaar Bank, in collaboration with Mastercard, launched a new service that allows Ithmaar Bank customers to transfer money from Bahrain to various countries around the world almost instantly. The service, called IthmaarSEND, is provided to customers directly from the Ithmaar Bank eBanking platform and offers a faster, simpler and more secure way of transferring money to almost anywhere in the world, through mobile phones, tablets or any other internet-connected device.

Ithmaar Bank owns 67% of Faisal Bank Limited in Pakistan, which began to expand significantly in the past few years, reaching 576 branches in most cities at the end of 2020, with a noticeable increase in the its financing, deposits and investment accounts portfolios.

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