Ithmaar reports net profit of US$1.22m

Manama : Ithmaar Bank, a Bahrain-based Islamic retail bank, reported yesterday a net profit of US$4.83 million for the first quarter of 2016, compared to US$7.62m net profit reported for the same period last year. Net profit attributable to equity holders was US$1.22m for the quarter, which is lower by 54 per cent compared to the US$2.64m profit reported for the same period last year.

Announcing the results, Chairman Prince Amr Al Faisal said, “The financial results of the first quarter of 2016 include an operating income of US$61.48m, compared to US$83.34m for the same period last year which included a one-off gain realised on government securities by our Pakistan subsidiary, Faysal Bank Limited.” 

“Total expenses for the three-month period ended 31 March 2016 reduced to US$45.62m, from US$48.94m for the same period last year, despite the continued retail banking branch expansion,” said Prince Amr. “This significant achievement is, in a large part, due to the ongoing cost control measures which started in 2014 both in Bahrain and Pakistan operations,” he said.

“I am pleased to report that the balance sheet continues to be stable, and our core business continues to grow,” said Chief Executive Officer, Ahmed Abdul Rahim. 

“This is evident from the equity of unrestricted investment account holders growing to US$2.29 billion as at 31 March 2016, a 10.0pc increase compared to US$2.09bn as at 31 March 2015, and a
4.3pc increase compared to US$2.20bn as at 31 December 2015,” he said. 

“Correspondingly, our total financing portfolio grew to US$3.73bn as at 31 March 2016, a 7.5pc increase compared to US$3.47bn as at 31 March 2015 and a marginal increase as compared to US$3.72bn as at 31 December 2015. Liquid assets now represent 11.6pc of total assets compared to 10.6pc as at 31 December 2015,” he added.

Looking ahead, the bank said it would shortly inaugurate a new, full-service branch in Galali – its eighteenth branch in the Kingdom. Ithmaar Bank is also in the process of adding two new ATMs, bringing the total number of
ATMs to 48.

The bank also plans to create a new holding company that will be listed on Bahrain Bourse and Kuwait Stock Exchange and licenced and regulated by the Central Bank of Bahrain (CBB). The new holding company will retain 100pc ownership of all assets presently owned by Ithmaar Bank.
These assets will be allocated into two wholly owned subsidiaries, an Islamic retail bank subsidiary which will hold the core retail banking business, and an asset management subsidiary which will hold the investment assets. These two subsidiaries will also be licensed and regulated by the CBB.  

Ithmaar Bank said it is now working with regulators towards finalising necessary legal and other requirements ahead of anticipated implementation later this year.