Bank ABC reports Q3, nine-month profit

TDT | Manama

The Daily Tribune – www.newsofbahrain.com

Bank ABC (Arab Banking Corporation) yesterday reported profits for its third quarter and nine-month helped by strong performance across its core markets.

“The Group successfully and steadily resumed its path to normal profitability whilst the execution of the strategy has accelerated demonstrating the depth of the Group’s resilience,” said Bank ABC’s Group Chairman, Saddek Omar El Kaber.

“We look forward to concluding the year on a strong note having successfully navigated through the challenges of the pandemic over the last 18 months and having completed the acquisition and consolidation of BBE.”

The Group also said it expects the legal merger of BLOM Bank Egypt with Bank ABC by the end of Q1 2022 will significantly “deepen our presence in Egypt to build a powerhouse in this market of fundamental importance to our MENA aspirations.”

Q3 results

Consolidated net profit attributable to the shareholders of the parent was US$25 million, 127% higher compared to a net profit of US$11 m reported for the same period last year.

Earnings per share were US$0.01 compared to minimal in the same period in the previous year.

Total comprehensive loss attributable to the shareholders of the parent was US$29 m, compared to an income of US$38 m reported for the same period last year, mainly due to higher unrealised loss on exchange translation in foreign subsidiaries.

On a headline basis, Total Operating Income rose 16% to US$219 m, while the increase was 21% to US$233 m from the prior-year quarter on an underlying basis.

(last year’s comparatives being significantly affected by the adverse impact of the COVID pandemic).

Net interest income was US$159 m, 22% higher against US$130 m reported for the same period last year, after absorbing the impact of declining interest rates compared to the same period last year supported by growing volumes in certain markets.

Operating expenses were at US$147 m, 30% higher than US$113 m for the same period last year.

On an underlying basis, the Group achieved a Net Operating Profit of US$88 m for the quarter, 11% higher compared to US$79 m in Q3 2020. 

Headline Net Operating Profit was US$72 m, compared to US$75 m reported for the same period last year (current year impacted by currency fluctuations).

Impairment charges (ECL) or credit loss expenses were US$29 m compared to US$60 m reported for the same period last year, with stabilising economic outlook from the lows last year, and without the major impact of regional fraud events that created abnormally elevated ECL charges during 2020.

Nine months results

Consolidated net profit attributable to the shareholders of the parent, for the nine months of 2021 was US$80 m, compared to a net loss of US$56 m reported for the same period last year.

Earnings per share for the period was at US$0.03, compared to US$-0.02 in the previous year.

Total comprehensive income attributable to the shareholders of the parent was US$92 m compared to a total comprehensive loss of US$358 m reported last year, reflecting the net profit and relatively stable markets during the nine months of 2021 compared to last year.

On a headline basis, total operating income rose 46% to US$626 million, and on an underlying basis, the increase was 15% to US$646 million from the same period last year.

(last year’s comparatives being affected by significant currency fluctuations and hedging in Banco ABC Brasil).

Net interest income was US$419 m, 10% higher against US$382 m reported for the same period last year, after absorbing the impact of declining interest rates and FX depreciation.

On an underlying basis, net interest income was 11% higher year on year.

Operating expenses were at US$400 m, 11% higher than US$360 m for the same period last year.

Cost trajectory returning to normal levels with an unrelenting focus on cost discipline and continuing investments into the Group’s digital transformation and strategic initiatives.

On an underlying basis, the Group achieved a net operating profit of US$243 m, 21% higher than the US$201 m reported last year. 

The headline net operating profit was US$ 226 m, compared to US$68 m reported for the same period in 2020.

Impairment charges (ECL) or credit loss expenses for the period were US$78 m, 67% lower than the US$234 m reported for the same period last year.

Loans and advances stood at US$16.4 billion, 4.9% higher than the US$15.7 bn reported at 2020 year-end after including US$0.8 bn of loans and advances of BBE.

Deposits were at US$24.8 bn including US$2.7 bn of BBE, compared to the levels of US$21.3 bn at 2020 year-end.