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Manama, Bahrain: Bank ABC (Arab Banking Corporation B.S.C.) today announces its results for the first quarter of 2018:
Financial Highlights – Q1 2018
Business Performance
- Consolidated net profit, attributable to the shareholders of the parent, for the first quarter of the year 2018 was US$53 million, 6% higher compared to US$50 million reported for the same period last year. The Earnings per share for the first quarter of the year 2018 remained steady at US$0.02, similar to the first quarter of the previous year.
- On a headline basis, total operating income was US$211 million 8% lower than the US$229 million reported for the first quarter last year. After adjusting for the effects of foreign currency hedging transactions in Banco ABC Brazil (“BAB”), which have an offsetting tax charge impact, and other one-off non-core items, the Total Operating Income showed a 4% year on year growth benefiting from both improving interest rates and stabilising market conditions. Out of the total operating income, the net interest income was US$138 million, 3% higher when compared to US$134 million reported during the first quarter of 2017.
- Operating expenses were at US$119 million, US$7 million higher than the same period last year, due to inflation and continuing investment costs.
- Impairment charges for the quarter were US$12 million compared with the previous year’s US$29 million, particularly indicating the improving market conditions in Brazil and a relatively benign Q1 experience in our Wholesale and MENA businesses. Impairment for the quarter is now computed on IFRS 9 basis covering the entire portfolio.
- Ratio of non-performing loans to gross loans at 3.7% compared to 2017 year-end levels of 3.5%, and normalises to 2.8%, when legacy fully provided loans are adjusted for.
- Tax charge US$14 million, compared to the charge of US$23 million for the first quarter of 2017 (the variance largely arising from the tax treatment of currency hedges in BAB noted above).
Balance Sheet
- Total assets stood at US$28.9 billion at the end of the first quarter of 2018, comparable to US$29.5 billion at the 2017 year-end, with loans and advances growing to $15.4 billion, as the Group continues to prioritise asset quality and returns.
- Deposits at the end of the quarter were US$20.0 billion compared to 2017 year-end deposits of US$20.2billion. In particular, Customer deposits increased by US$182 million during the period, resulting from focus on diversifying the deposit composition.
- Shareholders’ equity at 31 March 2018 stood at US$3,857 million after the distribution of 3% dividend to the shareholders compared to US$ 3,930 million at 2017 year-end.
- Liquidity ratios strong with LCR and NSFR on a Basel III basis exceeding 100% with comfortable buffer and liquid assets to deposits ratio healthy at 54%.
- Capital Ratios strong: Tier 1 17.0% and total capital adequacy ratio (CAR) 18.3%.
Bank ABC’s Group Chairman, Mr. Saddek Omar El Kaber, commented that “We are starting the year well with improved growth in profitability year on year. Pleasingly, and as expected, credit conditions show signs of stabilising and we remain cautiously optimistic on the outlook for the full year. Loan growth was achieved while maintaining strong balance sheet and risk metrics, which continue to remain a key focus area, and which benchmark well against regional and international standards. Our strategic priorities on our Wholesale Banking transformation, our digital bank rollout and our organisational health continue to progress and underpin the improving trend on our financial performance.”
Bank ABC is a leading player in the region’s banking industry and provides innovative wholesale financial products and services that include corporate banking, trade finance, project and structured finance, syndications, treasury products and Islamic banking. It also provides retail banking services through its network of retail banks in Jordan, Egypt, Tunisia and Algeria.
– Ends –
For more information please contact
Brendon Hopkins, Group CFO, Manama, Kingdom of Bahrain, tel. +973 17543223 or fax +973 17531311.
