BBK posts BD56.4m net profit
Manama : BK yesterday announced a net profit of BD56.4 million attributable to owners for the financial year ended 31st December 2016, 6.0 per cent higher compared to the previous year (2015: BD53.2m); with earnings of 49 fils per share (2015: 50 fils per share). The board also recommended distribution of 30 fils cash dividend per share.
Operating revenues increased by 10.2pc to reach BD133.5m compared to BD121.1m recorded during the previous year, driven mainly by a growth of 18.1pc in net interest income to reach BD85.8m (2015: BD72.7m), as the bank restructured its balance sheet by focusing strategically on more profitable segments such as retail, reducing thinly priced exposures and adequately controlling the cost of funding. In addition, strong performance by the bank’s strategic investments contributed to the growth in operating revenues as the bank’s share of profits of associated companies and joint ventures increased by 29.7pc from BD4.2m reported in 2015 to BD5.5m for the year ended 2016. Other income (fees and commission, foreign exchange and investment income) for the year 2016 amounted to BD42.2m (2015: BD44.2m).
Operating expenses increased moderately by 6.6pc for the year ended 31st December 2016. Nevertheless, the cost-to-income ratio improved to 39.8pc compared to 41.1pc as of 2015.
The bank has decided to early adopt IFRS 9 following the approval received from the Central Bank of Bahrain (“CBB”) replacing IAS 39. This has resulted in higher net provision charges of BD22.6m, compared to BD19.5m during 2015.
Total comprehensive income for 2016 stood at BD67.3m compared to BD20.1m for the year ended 2015, mainly due to the significant improvement in fair value of investment securities.
For the three months ended 31st December 2016, BBK reported a net profit of BD13.2m, compared to BD13.0m recorded during the corresponding period of 2015. Total revenues for the prior-mentioned period amounted to BD32.6m (2015: BD31.7m), while total operating expenses stood at BD14.7m (2015: BD13.4m). The net provision requirements for the final quarter of 2016 amounted to BD4.2m (2015: BD5.2m).
Commenting on the results, Chief Executive, Reyadh Sater said, “BBK was once again able to break previous record profits, and vigorously pursue and achieve a notable progress with the implementation of its new strategy.”
BBK’s balance sheet stood at BD3,702.6m as of end of December 2016 compared to BD3,646.4m as of end of December 2015. The loans portfolio stood at BD1,767.1m (December 2015: BD 1,764.8m). Customer deposits stood at BD2,493.7m compared to BD2,642.9m as of end of December 2015, with a very comfortable loans to customer deposits ratio of 70.9pc (December 2015: 66.8pc).
BBK successfully issued its award winning perpetual Tier 1 capital securities, increasing the bank’s capital by BD86.1m. As a result of this issuance, and the growth in profits during the year, the bank’s equity attributable to shareholders as of end of December 2016 stood at BD472.4m, 31.5pc higher, which reduced the need for liability financing and reflected positively on the capital adequacy ratio which remained well above the regulatory requirements.
During the same meeting, the board discussed other important issues on its agenda such as the Corporate Governance Report, the Board recommendations on the different appropriations and the Donations budget for the year 2017.
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