Prince Amr Al Faisal
Ithmaar Bank swings to $7.3m loss in H1
Manama, August 14, 2013
Bahrain-based Ithmaar Bank, a leading Islamic retail bank, announced a net loss of BD2.8million ($7.38 million) for the first six months of 2013, compared to a profit of BD583,000 in the same period last year.
The announcement, by Ithmaar Bank chairman Prince Amr Al Faisal, followed the review and approval, by the Board of Directors, of the bank’s consolidated financial results for the six-month ended June 30.
“On behalf of the Ithmaar Bank Board of Directors, I am pleased to announce Ithmaar Bank’s profitability before provision for impairment and taxation,” said Prince Amr. “I am also pleased to report that operating income continues to be stable, at BD36.8million, despite a significant compression of margins in overseas subsidiary due to 300 basis points cuts in benchmark profit rates.”
The results show a net loss of BD3.4million for the three month period ended 30 June 2013 as compared to a net profit of BD753thousand for the same period last year.
“Cost control continues to be our focus,” said HRH Prince Amr. “During the first six months of 2013, total expenses were reduced by about 4.5 per cent – an achievement that is made all the more impressive considering our continuously expanding retail banking network,” he said.
“The margin compression in overseas subsidiary has impacted the revenues and funding cost and consequently the net margins,” said Prince Amr.
“The bank has reported a profit of BD838thousand before provision for impairment and taxation for the six month period ended 30 June 2013 as compared to BD2.7million for the comparative period last year.
“The balance sheet marginally increased but the core business continues to grow and the equity of unrestricted investment account holders increased, by 13.64 per cent, to BD679.2 million in the first six months of 2013, compared to BD597.7 million as at 30 June 2012; and Murabaha and other financings, increasing by 1.6 per cent to BD1.19 billion in the first six months of 2013 as compared to BD1.17 billion as at 30 June 2012,” he said.
“Liquid assets, comprising cash, balances and commodity placements with banks, financial and other institutions, now represent about 13per cent of the balance sheet, this liquidity excludes investment by overseas subsidiary in local treasury bills and other sovereign instruments resulting in increased investment securities over the comparative period,” said Prince Amr.
“As part of its strategy of retail focus, Ithmaar has completed the voluntary surrender of Faisal Private Bank’s (Switzerland) banking and securities dealer license on 30 June 2013 and the renamed entity, Faisal Private Bureau (Switzerland), will be responsible for managing existing wealth and asset management business,” he said.
Ithmaar Bank chief executive officer and member of the Board, Mohammed Bucheerei, said the bank continues steadfastly on its board-approved retail business focus with the objective of becoming the region’s premier Islamic retail bank.
“The Bank continues to significantly enhance its products and services and has recently launched Premier banking (targeting HNWI) and 7esabi (targeting youth),” said Bucheerei.
“Ithmaar has won the prestigious Hawkamah Bank Corporate Governance Award in recognition of its corporate governance achievements.
“The bank was chosen from among banks across the Middle East, North Africa and South Asia for the Award, a regional initiative that aims to recognize, support and encourage superior governance practices in the banking sector in Mena,” he said.
“Ithmaar is firmly committed to becoming the region’s premier Islamic retail and commercial bank as we continue to increase our focus on core banking activities while working towards restructuring our investment portfolio,” said Bucheerei.
“Ithmaar now boasts one of the largest retail banking networks in Bahrain with 17 full service branches and 43 automated teller machines (ATMs) in 26 strategic locations around the Kingdom. We will continue to work towards further developing our core retail business in the year ahead with the commissioning of additional new branches as well as the introduction of new products and services,” he said. – TradeArabia News Service