Bank ABC posts $30m Q1 profit

TDT | Manama

The Daily Tribune – www.newsofbahrain.com

Bank ABC (Arab Banking Corporation) yesterday said it had started the year on a solid and profitable footing, recovering from the impact of 2020 and carefully navigating post-COVID 19 transitional operating conditions amid episodic lockdowns and constrained work environments.

The group said its acquisition of BLOM Bank Egypt is progressing and is in the advanced states of regulatory approval and closing process. Bank ABC’s quarterly consolidated net profit attributable to the shareholders of the parent of US$30 million, compared to a net loss of US$62 m in the same quarter a year ago.

The net profit, the bank said, reflects a better economic outlook, after the Bank absorbed the impact of regional NMC fraud events experienced in 2020. Earnings per share were US$0.01, compared to negative US$0.02 for the same period last year. Total comprehensive loss attributable to the shareholders of the parent was US$16 m, impacted by foreign exchange translation in foreign subsidiaries, compared to US$534 m reported for the same period last year.

On a headline basis, Total Operating Income was US$182 m, 78% higher compared to US$102 mn reported for the same period last year. On an underlying basis, Total Operating Income was at US$205 m for the period, compared to US$200 m for the same period last year. Net interest income was US$122 mn, 11% lower than US$137 m reported in the year-ago quarter, after absorbing the impact of declining interest rates compared to the same period last year.

Operating expenses were at US$125 m, 6% lower than US$133 m for the same period last year. On an underlying basis, Net Operating Profit was US$76 m for the quarter, 13% higher compared to US$67 m in Q1 2020. Impairment charges (ECL) were US$20 m compared to US$120 m reported for the same period last year, with reversal of economic outlook from the lows last year flowing through the expected loss estimates under IFRS 9, and without the major impact of regional fraud events such as NMC, that created abnormally elevated ECL charges during 2020.

Tax charge US$1 m, compared to the recovery of US$98 m for the first quarter of 2020, the variance largely arising from the tax treatment of currency hedges in Banco ABC Brasil (BAB) which have an offsetting impact on Total Operating Income. On an underlying basis, the tax charge for the period was at US$15 m compared to nil for the same period last year.

Loans and Advances stood at US$15.2 billion compared with levels of US$15.7 bn at 2020 year-end reflecting our continuing emphasis on prudent use of balance sheet. Deposits were at US$21.6 bn, compared to the levels of US$21.3 bn at 2020 year-end.