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Al Salam Bank Q1 net profit rises a robust 7pc to $17.3m

May 14, 2022
banking

Al Salam Bank, a leading regional Islamic bank headquartered in Bahrain, posted a 7% rise in Q1 net profit attributable to shareholders to BD6.5 million ($17.3 million) compared to BD6.1 million for Q1 2021.

The increase reflects an overall improvement in macroeconomic conditions. Correspondingly, earnings per share increased by 12% to 2.8 fils compared to 2.5 fils in Q1 2021.

Total operating income for the quarter stood at BD26.0 million, reflecting a 7% decrease from the BD28.0 million recorded in first quarter of 2021. Total shareholders’ equity decreased by 2% from BD296.3 million in 2021 to BD290.2 million at the end of March 2022, as a result of dividends distribution.

Financing assets at a record

Total assets remained largely unchanged at BD2.7 billion in March 2022, while financing assets increased by 3% on a quarter-on-quarter basis to a record BD1.4 billion, the highest since the bank’s establishment. The growth was accompanied with a robust improvement in asset quality during the first quarter of 2022, with the nonperforming facilities ratio decreasing to 2.07%, driven by effective recovery initiatives and quality new asset bookings.

The bank’s sukuk portfolio also increased by 5% to BD672 million in March 2022. The bank continued to maintain a strong capital adequacy ratio of 26.9% as of March 31, 2022.

“We have continued with our strong performance in 2021 and made a robust start to 2022 despite continued economic uncertainty and volatility globally,” said Shaikh Khalid bin Mustahil Al Mashani, the Chairman of Al Salam Bank.

Growth initiatives

“The implementation of growth initiatives to acquire further market share reflected positively on the bank’s performance during the quarter. While inflation is expected to change the velocity of monetary policy actions, we remain confident that the bank is incredibly well positioned to achieve further growth and success in the coming period. We look forward to delivering our aspirations and continuing with our strategy to grow the balance sheet, improve our assets and enhance profitability.”

Al Salam Bank recently announced the acquisition of Ithmaar Bank’s consumer banking division alongside a number of other financial assets in a landmark transaction valued at $2.2 billion.

Rafik Nayed, Group Chief Executive Officer of Al Salam Bank, commented: “Our existing core banking book continued its upward trajectory driven by strong organic growth and optimisation across all verticals. While our existing operations continue to yield strong results, the impending acquisition of Ithmaar Bank’s consumer banking division complements our strategy of achieving sustainable long-term growth through organic and inorganic initiatives. We are focused on strengthening our agile and resilient model by continuing to invest in our offerings to enhance our clients’ experience.

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