BBK reports 6.5pc rise in net profit

Manama : BBK, Bahrain’s pioneer retail bank, reported a net profit attributable to the owners of the bank of BD31.3 million for the first half of 2016, compared to BD29.4mn reported during the same period of last year reflecting an increase of 6.5pc. 

The financial results were approved by the bank’s board of directors during its meeting held yesterday. 

Commenting on the results, the board expressed its satisfaction with the financial results of the bank, stating,  “The solid and steady growth in our performance is a testimony on the viability of our business model.

“Weak economic trends and financial markets volatility continued during the second quarter of 2016, which were intensified by the persistent low oil prices, and the bulk credit ratings downgrade of sovereigns and financial institutions in oil exporting countries. 

“However we continue to have full confidence in BBK’s ability in adapting to the changes in business environment.”

The growth in net profit was fuelled by 11.5pc increase in operating revenues, reaching BD66.8mn for the six months ending June 30, 2016 compared to BD59.9mn reported during the same period of last year. Net interest income increased by 23.4pc from BD35mn to BD43.2mn as the bank continued to restructure its balance sheet towards higher yielding assets. 

The bank’s strategic investments reported a good performance, resulting in higher bank’s share of associate’s income by 31.7pc, from BD1.8mn to BD2.4mn. 

Operating expenses increased by 6.8pc during the first half of 2016 compared to the same period last year as a result of expansion of the bank’s operations and distribution networks. Nevertheless, the cost-to-income ratio improved from 40.2pc to 38.5pc reflecting the bank’s ability to generate healthy growth in its income stream and at the same time exerting effective cost management. 

In line with the bank’s prudent provisioning policy, BBK increased its loan loss reserve by BD9.9mn over the first half of the year partially on account of the general provisions to support unexpected future market turbulence. 

Total comprehensive income for the first half of 2016 stood at BD14.5mn, which was adversely impacted by the volatility in financial investment markets.

For the second quarter of 2016, the bank achieved a net profit of BD16mn compared to BD14.6mn reported during the same period of 2015. This was mainly attributable to the strong growth in net interest income which increased by 33.3pc  from BD17.1mn reported in the 2nd quarter of 2015 to BD22.8mn for the 2nd quarter of 2016. 

Commenting on the results, Chief Executive Reyadh Sater said, “The second quarter of 2016 was a period of more success and strategic achievements and I am very delighted with the financial results and the progress made. 

“The launch of Turkey’s Representative Office is an important step forward towards growing our international presence and diversifying our operations, where the bank already has well-established relationships with blue-chip corporates and financial institutions. 

“As the bank developed its three years strategic plan, the board approved an increase in capital to support it as well as meeting the increasing capital adequacy requirements of Basel III. This capital was raised during the months of April and May 2016 through rights issue to the bank’s existing shareholders in the form of AT1 convertible capital securities,” he added.