BBK posts net profit of BD15.28m for Q1 2016

Manama : The Board of Directors of BBK, yesterday approved the financial results for the first quarter of 2016. The bank recorded a net profit attributable to the owners of BD15.28 million, an increase of 2.9 per cent compared to the corresponding period of the previous year of BD 14.85m. 

Commenting on the Bank’s results, the Board of Directors commented, “We demonstrated once again the robustness of our business model and our ability to adapt our operations to the market circumstances and contribute positively to all our stakeholders at all times.”

The increase in net profit was fuelled by a 9.4pc hike in operating revenues to reach BD 32.2m compared to BD 29.5m during the first quarter of last year. Net interest income soared by 14pc from BD 17.9m to BD 20.4m at the end  of the first quarter of 2016, as the bank continued its efforts to restructure its balance sheet toward higher yielding assets. 

Foreign Exchange, investment, and associates’ income increased by 6.3pc to BD 4.5m (March 2015: BD 4.3m) during the aforementioned period, while fees income stood at BD 7.3m (same level of last year). 

As the bank continued to invest in its human capital, technology infrastructure and distribution networks, operating expenses increased by 11.1pc to stand at BD 13m for the first quarter of 2016 compared to BD 11.7m during the same period last year. Nevertheless, BBK was able to maintain an excellent cost to income ratio of 40.3pc reflecting the bank’s ability to exert proper cost control and generate healthy growth in revenue streams.

Total comprehensive income for the first quarter of 2016 stood at  negative  BD 0.6m compared to BD 9.4m recorded for the same period of 2015 due to revaluation adverse impact arises from the severe volatility in the market prices of some investments. 

In line with the bank’s prudent provisioning policy, BBK set aside BD 3.7m as net provision for its exposures, bringing the total coverage ratio for impaired loans to a very safe level of 123.8pc (considering both specific and collective provisions), at the same time reducing the non-performing loans by BD 1.98m from the 2015 year-end balance.

Commenting on the bank’s performance, Reyadh Sater, Chief Executive, said “We were able to maintain our growth momentum, increase our profitability and expand our balance sheet by weathering the storm that hit the financial markets and withstanding the slowdown in the local and global economy.”

BBK’s financial position as of March 31  showed a growth of 3.6pc year-to-date, standing at BD 3,777.3m. The growth in the balance sheet was mainly a result of the bank’s shift in strategy towards maintaining higher stocks of highly liquid assets, to help the bank cater for any liquidity pressures that might be triggered by the prevailing market circumstances.  

The total net loans and advances portfolio stood at BD 1,750.7m (December 2015: 1,764.8m), while the non-trading investment portfolio stood at BD 764.5m (December 2015: BD 758.1m). Customer deposits continued to stand at strong levels of BD 2,668.0m compared to BD 2,642.9m in December 2015.  

During the same meeting, the Board discussed other important issues on its agenda such as the investment strategy 2016, the annual liquidity strategy and some of the Board level policies and risk management policies.