Al Baraka Banking Group posts Q1 net profit of $26 million

TDT | Manama

The Daily Tribune – www.newsofbahrain.com

Bahrain-based Al Baraka Banking Group yesterday reported an increase in its first-quarter profit, which the company said was helped by business strategies, increased operational efficiency and contributions from all its units. “We were able to achieve good results during the first quarter of this year, thanks to the prudence of our business strategies, our diversified operational and profitability resources, in addition to the contribution of all our units towards achieving these results,” said Mazin Manna, the Board of Directors and Group Chief Executive Officer of Al Baraka Banking Group.

“These efforts led to an improvement in the return on equity from 7.1% in the first quarter of 2020 to 7.5% in the first quarter of 2021, and improve its operational efficiency from 60% to 59% during the same period,” he added.

Chairman of Al Baraka Banking Group, Abdullah Saleh Kamel, said, “The efforts of the Group and its subsidiary units have continued to enhance the financial performance and improve the efficiency of the Bank during the first quarter of this year. This is in addition to containing the repercussions of the outbreak of the Corona pandemic.

Quarterly results

First-quarter net income attributable to shareholders of the parent company was US$ 26 million, compared to the US$ 24 m for the same period in 2020, an increase of 5%. The basic and diluted earnings per share were US Cents 2.11 compared to US Cents 1.97 in the year-ago quarter.

Operating expenses dropped 12% to reach US$ 136 m from US$ 153 m in the yearago quarter. The total net income was US$ 41 m, compared to the US$ 40 m, an increase of 2%. Net operating income decreased by 8% to US$ 93 m, compared to US$ 101 million in the same period last year.

The decline in revenue, the group said, reflects factors resulting from the economic and financial operating environment, such as the devaluation of the currency in some countries where the Group operates and the drop in profit margins resulting from the decline in the USD interest rates and other currencies, as a result of monetary easing measures.

“In view of this, the Group and its subsidiaries continued to take precautionary measures, conservatively expanding financing and investment portfolios.” The Group said it also continued to build provisions amounting to US$ 28 m in the first quarter of 2021, compared to US$ 40 m during the same period last year.

The equity attributable to the parent’s shareholders and Sukuk holders amounted to US$ 1.39 billion by end of March 2021 compared to US$ 1.42 bn by the end of December 2020. This reflected a decline of 2% due to foreign currency translation reserve. Total assets of the Group showed a decrease of 1% by the end of March 2021 to reach US$ 28.00 bn, compared to US$ 28.25 bn by the end of December 2020.

Customer accounts including due to banks and financial institutions as at the end of March 2021 reached US$ 24.11 bn, a decrease of 2%, when compared to the US$ 24.65 bn level at the end of December 2020, representing 86% of total assets.