Bank ABC posts US$70 million H1 profit

TDT | Manama                                                             

The Daily Tribune – www.newsofbahrain.com

Bank ABC (Arab Banking Corporation) yesterday reported a jump in its quarterly and H1 profits, aided by higher interest rates, volumes and inclusion of revenue from BBE, despite facing unexpected headwinds from geopolitical developments and persistent high inflation across some markets. The headwinds, the bank said, were counterbalanced by sustained high oil prices, improving economic activity in other markets and rising interest rates.

Bank ABC also said that its merger and integration of BBE along with its digital and other strategic initiatives are progressing well. Group Chairman, Saddek Omar El Kaber, said, “We are extremely pleased with the Group’s performance with historic achievement in revenues and solid growth in profits during the first half of 2022 despite unexpected headwinds.”

“We are looking forward to further progress on our strategy and gaining momentum in our revenues to achieve record levels for the full year.” Second quarter results Consolidated net profit attributable to the shareholders of the parent was US$39 million, 56% higher compared to US$25 m reported for the same period last year. Earnings per share remained unchanged at US$0.01.

Total comprehensive income attributable to the shareholders of the parent was a loss of US$111 m, compared to US$137 m profit reported for the same period last year, mainly from a net impact of foreign exchange translation in foreign subsidiaries and change in fair value of debt instruments.

On a headline basis, total operating income increased 21% to US$273 m, benefitting from higher interest rates, volumes and inclusion of revenue from BBE during this year. On an underlying basis, total operating income jumped 33% to US$270 m from the year-ago quarter.

Net interest income surged 40% to US$193 m, benefitting from higher interest and supported by growing volumes in some key markets. Operating expenses increased 34% to US$172 m from a combination of consolidation of BBE as well as the Group returning to a more normal level of activity.

On an underlying basis, net operating profit was US$96 m, 28% higher, compared to US$75 m in Q2 2021. Headline net operating profit was US$ 101 m, compared to US$97 m reported for the same period last year. Impairment charges or credit loss expenses were US$26 m compared to US$29 m reported for the same period last year. The tax charge was US$22 m, compared to US$35 m for the same period last year.

H1 performance Consolidated net profit attributable to the shareholders of the parent was US$70 m, 27% higher compared to US$55 m reported for the same period last year. Earnings per share was US$0.02, unchanged from the corresponding period, last year.

On a headline basis, total operating income was US$520 m, 28% higher, compared to US$407 m reported for the same period last year. On an underlying basis, Total Operating Income was at US$523 m, compared to US$400 m for the same period last year, benefitting from increase in interest rates and consolidation of BBE.

Net interest income was US$370 m, 42% higher against US$260 m reported for the same period last year, supported by higher interest rates, higher loan volumes, consistent margins and the addition from BBE. Impairment charges (ECL) for the period were US$51 m compared to US$49 m reported for the same period last year, broadly in line with historic credit loss experience. Tax charge US$42 m, compared to US$36 m for the first half of 2021.

Loans and Advances were 2% higher for the quarter at US$17.0 bn compared with US$16.8 bn at 2021 year-end, reflecting the Group’s selective underwriting and strengthening in BRL FX rate. Deposits were at US$24.7 bn, compared to US$25.8 bn at the 2021 year-end.