BBK nets 14.4pc growth

BBK yesterday reported a 14.4 per cent rise in its 2018 annual growth from a year ago helped by various factors including increasing interest rate environment as well as growth achieved in the retail banking assets. BBK board also recommended a cash dividend of 40 per cent of the share capital, equivalent to 40 fils per share to the shareholders registered at the date of the AGM, subject to the approvals. Reyadh Sater, BBK’s CE said: “BBK has maintained its record of sustained profitability and achieved growth of 14.4 per cent in 2018.”

Net profit attributable to the owners of the bank was BD 67.1 million, compared to BD 58.7m in the previous year. The increase in the net profit was attributed partly to increasing interest rate environment, and partly due to the growth achieved in the retail banking assets by 9.1pc to reach BD 681.0m (2017: BD 624.3m), increasing the retail banking profits by 33.5pc to reach BD 30.1m (2017: BD 22.5m). Operating profit (excluding net provisions and tax) during the year rose to BD103.5m, compared to BD89.1m last year, with an increase of 16.2pc.

Operating revenue was BD161. 2m, compared t o BD143.1m in last year, with an increase of 12.7 pc. Basic Earnings per share increased to 56 fils compared to 48 fils last year. Net loans and advances grown marginally by 1.8pc in 2018 to reach BD 1,772.5m compared to BD 1,740.7m as end of December 2017. Investment securities portfolio increased by 6.8pc to stand at BD800.3m compared to BD749.0m as end of December 2017. Customer deposit portfolio stood at BD2,374.5m compared to BD 2,623.6m, while the loans to customer deposits ratio stood at a comfortable level of 74.6 pc (2017: 66.3 pc).

Net interest income grew by 20.9 pc which was driven by the increase in loans and investments portfolio, in addition to improving interest rate environment which resulted in higher margins. Non-interest income (Fees and Commission Income and Other income) also increased marginally by 1.0pc due to higher income received from dividends of equity investments. Net provisioning requirements was increased to BD35.4m for the year 2018 (BD29.0m last year) to cater for expected credit loss mandated by IFRS 9, as well as the conservative provisioning policies followed by the bank.

Total comprehensive income attributable to owners of the bank for the year ended 31st December 2018 amounted to BD47.4m compared to BD65.0m during last year. Other comprehensive income has been impacted negatively by the instability and volatility in financial markets which led to unrealized negative valuations on investment securities and foreign currency translation adjustments. For the fourth quarter, net profit attributable to the owners of the bank was BD18.7m, compared to BD13.8m in the year earlier quarter, with an increase of 35.4 pc.

The increase was mainly due to the healthy increase in Net interest income by 28.2pc due to improvement in interest rate environment, active balance sheet management and deployment of resources in higher yielding assets such as loan and advances and investment securities. Operating profit (excluding net provisions and tax) for the quarter was BD27.9m, compared to BD 21.1m in the year ago quarter, with an increase of 32.2 pc.

The bank achieved BD 42.2m operating revenues, compared to BD35.5m in the corresponding quarter of last year, with an increase of 18.9pc. Basic Earnings per share were 14 fils compared to 10 fils in the fourth quarter of last year. Commenting of the results, the Board of Directors said that BBK’s new three-year strategic plan has now been finalised, following an internal process supported by internationally recognized strategy consultants.