Bank ABC’s profits surge on robust core business, favourable market conditions

TDT | Manama                                                      

The Daily Tribune – www.newsofbahrain.com

Riding on the back of better performance of its core business and improvements in the profit rate environment, Bank ABC reported profits that rose from a year ago.

The Bank closed the year with net profit of US$46.3 million, representing 19.4% improvement year-on-year from US$ 38.8m in 2022. Total operating income before credit losses stood at US$ 59.4m, 28.7% higher on a yearon-year basis.

The balance sheet remained healthy, maintaining strong capital ratio. Recognizing the Bank’s performance, the Islamic International Rating Agency (IIRA) has reaffirmed ratings of Bank ABC Islamic at A+(bh)/A1(bh) on the national scale and A-/A2 on the international scale. Outlook on the assigned ratings is ‘Stable’.  

Commenting on the results, Hammad Hassan, Managing Director of Bank ABC Islamic said, “We have closed the year with sound profitability and a strong balance sheet.

Our capital ratios remain robust and healthy. The full year performance is underpinned by stable performance from core client business, a tight control on credit cost, as well as favorable profit rate environment.

Capital markets business outperformed during the year with the Bank leading several high profile Sukuk mandates for Sovereigns, GREs and private corporations.

Of these, the AirLease Sukuk, where Bank ABC was the Sole Lead Arranger, Sukuk Structuring Bank and JLM won the Bonds, Loans & Sukuk Middle East Awards 2023 for the “Global Corporate Sukuk Deal of the Year” and “Aircraft Finance Deal of the Year”.

Q4 results

Fourth quarter net profit increased to US$11.2m from US$9.1m reported in same quarter a year ago.

Total operating income before credit losses was US$15.3m compared to US$14.0m for the same period of last year. Operating expenses were US$2.5m, compared to US$2.4m for the same period of last year.

Full year 2023 results

Full year 2023 net profit was US$46.3m, 19.4 % higher than last year. Total operating income before credit losses was US$59.4m, 28.7% higher than last year.

Allowances for credit losses for the year were a charge of US$1.8m compared to a write back of US$1.7m reported last year. Operating expenses were US$10.9m, 26.2% higher compared to US$8.6m last year.

Adjusting for a one-off, exceptional expense of $1.8 MM, they were 6% higher on year-on-year basis.

Balance Sheet

ABC Islamic Bank’s total assets stood at US$2.501 billion as of December 31, 2023, compared to US$2.415 bn at 2022 year-end.

Investments were at US$809 m, compared to US$882 m at 2022 year-end. Murabaha receivables, Ijarah and Musharaka financing were at US$1,566 m, compared to US$1,451 m at 2022 year-end. Shareholders’ equity on December 31, 2023, stood at US$328 m, compared to US$330 m at 2022 year-end.

The bank’s capital base remains very strong with a capital adequacy ratio of 40.5%, predominantly Tier 1, which totalled 39.5%.