BBK posts record net profit results

BBK’s Board of Directors yesterday announced a new record net profit of BD53.2 million for the financial year ended December 31, 2015. It is 6.2pc higher than the net profit of BD50.1 million recorded in 2014, with earnings of 50 fils per share (2014: 47 fils per share). The Board of Directors have recommended distribution of 25 fils cash dividend per share subject to the approval of the Central Bank of Bahrain and the General Assembly of the bank.  

On the bank’s performance, the Board of Directors of the bank, said: “We were able to achieve a new record net profit and grow our balance sheet and business activities despite the challenging macroeconomic environment as a result of the collapse in oil prices and turbulences in financial markets. In  2015, the existing operations of BBK’s various group entities continued to flourish and performed very well.”

“In line with our growth strategy, the bank has recently been granted a licence by the Turkish authorities to establish a representative office in Turkey. Also, the bank obtained an approval from the Central Bank of Bahrain to establish a joint venture presence in London. Currently we are working with the UK authorities to finalise the regulatory and legal formalities,” they informed. 

The Board of Directors added: “2015 was the closing year of the current three-year strategic cycle. The Board of Directors and senior management had also finalised a new plan for the next strategic cycle 2016-2018.” 

Total comprehensive income for the full financial year ended December 2015 stood at BD 20.1 million compared to BD 39.9 million as of December 31, 2014, where the drop was mainly due to the plunge in the fair value of investment securities resulted from financial markets fluctuations. 

For the three months ended December 31, 2015, the bank reported a net profit of BD13.0 million, slightly higher than the same period of 2014 of BD12.8 million. 

A.Karim Bucheery, Chief Executive, said: “Our strategic approach and direction proved equal to the circumstances. In addition to achieving higher profitability, we were able to grow our balance sheet, improve the asset quality, strengthen the liquidity and funding positions. Our core deposits base increased at a very healthy rate reflecting the market confidence in BBK.”

“In March 2015 we raised $400 million in capital markets, largely replacing the bond that was maturing in October. As we embark on a new three-year strategy cycle, we are confident that we have built the foundations well,” he added. 

BBK’s balance sheet grew by 4.2pc during financial year 2015 reaching BD3,646 million as of December 31, 2015, fueled by a 7pc growth in customer deposits to reach BD 2,643 million. 

The funds received from the increase in customer deposits were used mainly to build up the liquidity reserve of the bank, as the bank continues to be cautious about possible liquidity squeeze in the markets.  

Loans and advances stood at BD1,764 million (December 2014: 1,846 million), while the non-trading investment portfolio stood at BD 758 million (December 2014: BD 787 million), as the Bank continue its strategy to restructure its balance sheet towards higher yielding assets and  fee-driven business.

BBK managed to keep its liquidity and funding positions at very comfortable levels with liquid assets (cash and balances with central banks, treasury bills, Financial assets at fair value through statement of income, and Deposits and due from banks and other financial institutions) to total assets standing at 32.04pc (December 2014: 29.19pc), and loan to total deposit ratio at 62.53pc (December 2014: 66.3pc). 

Capital adequacy ratio remained at comfortable levels well above the regulatory requirement at 14.87pc calculated in accordance with the Basel III framework.