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Bank ABC Islamic's nine-month net profit up 19.4pc

November 14, 2021
islamic finance

Bank ABC Islamic has announced that it has rebounded with significant improvement in net profitability for the nine-month period, registering a 19.4% growth to hit $26.7 million over last year after a one-off impact of fraud related impairments.

Announcing the results for the period ending September 30, the Bahrain-based bank said the asset quality remained strong with no significant account specific impairments.

Its total assets stood at $1.701 billion as of September 30, compared to $2.314 billion at 2020 year-end. The drop in assets is mainly attributable to excess liquidity in the market and subdued new business activity due to the pandemic.

Total operating income of $31.2 million, 11.5% lower than the same period last year, is mainly on account of consistently lower profit rate environment during 2021 and lower fee income in 2021 due to subdued markets activity impacting our capital markets businesses.

Otherwise, the core wholesale banking business performance was almost 95% of the year’s target.

Total operating expenses were slightly higher, 2.6% than last year’s level of $5 million, mainly related to staff costs, as the pandemic related subsidies provided by the government in 2020 were discontinued in 2021.

The bank continues to support the group in Islamic Banking initiatives with a strong start of Islamic banking in Algeria this year, under the brand name, ‘alburaq’ that caters to corporate, SME and retail segments.

Business Performance (three-month period):

*Net profit for the third quarter was $7.5 million compared to $7.9 million reported last year.

*Total operating income was $9.7 million compared to $11.9 million last year.

*Allowances for credit losses for the period were $0.4 million compared to US$2.5 million reported during the same period last year.

*Operating expenses were US$1.8 million, compared to US$1.4 million for the same period of last year.

Commenting on the results, Managing Director Hammad Hassan said: 'We are pleased on the overall performance of the bank in the nine month period, despite the impact on top line due to a combination of factors including lower profit rate environment, reduced capital markets activity and lower asset utilizations.'

'However, with the rebound in most businesses as the impact of the pandemic reduces, we are optimistic on recovery of core business lines and expect to close the year on strong footing,' he added.