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BBK posts 11.2pc profit increase to $133m

MANAMA, February 10, 2015

Bank of Bahrain and Kuwait (BBK) has reported 11.2 per cent increase in profit at BD50.1 million ($132.89 million) for the year ended December, compared with BD45.1 million for 2013.

The earnings per share for the year were 50 fils as against 44 fils per share for 2013, said a report in the Gulf Daily News (GDN), our sister publication.

Fees and commission income grew by 10.5 per cent to BD28.9 million, compared with BD26.2 million reported in 2013.

Net interest income stood at BD72.3 million as of end of last year, compared with BD68.9 million reported in the same period in 2013.

The bank also generated strong foreign exchange and investment income of BD16.3 million as of end of last year.

BBK said the 2012-13 cost optimisation initiative is now bearing fruit as operating costs decreased by 15 per cent to BD46.2 million, compared with BD54.4 million in 2013.

BBK's cost to income ratio has improved from 48.4 per cent as of end of 2013 to 39.3 per cent as of end of last year.

In continuation of the bank's efforts to strengthen its prudent risk management practices, the bank has amended its general loss reserves criteria to include total risk weighted exposure which will encompass all potential future eventualities of its gross exposure.

Accordingly, the loss provision reserves for last year increased by BD20.8 million (2013: BD12.1 million).

The bank said it will continue building up its precautionary general provisions to cater for unexpected future turbulences in the financial market.

"Our strong results reaffirm the success of the bank's focus on implementing key initiatives for growth outlined in strategic plans," chairman Murad Ali Murad said.

"This year will be even more critical as we appraise our achievements in the last year of our current strategic cycle, and determine the best ways to develop as a financial services group in the future," he added.

The bank had intensified its remedial and collection efforts during the year, which resulted in significantly reducing the level of non-performing loans.

Comprehensive income for the year was BD40.1 million, when compared with BD52 million in the corresponding year of 2013.

This was partially driven by the bond and equity investments volatility market prices, maturities, and partial sale of investments during the year.

For the three months ended December 31, BBK reported a net profit of BD12.8 million compared with BD10.5 million for the same period in 2013, with net interest income of BD19.7 million - an increase of 13 per cent when compared with BD17.4 million reported in the three months ended December 31, 2013.

Other income including fees and commission, FX and investment income stood at BD11.9 million for the fourth quarter, compared with BD10.9 million reported in the same period in 2013.

The bank registered provision charges net of recoveries of BD7.7 million for the fourth quarter compared to BD2.5 million in the same period of 2013.

BBK's balance sheet as of December 31, 2014 registered a growth of 8.4 per cent to BD3.5 billion, compared to BD3.2 billion reported in 2013. This was mainly due to strong growth in net loans and advances as well as the boost in non-trading investment portfolio.

Net loans and advances grew by 14.1 per cent to reach BD1.8 million, non-trading investment portfolio stood at BD788 million compared with BD744 million reported in December 2013.

Customer deposits continued with its upward positive trend and grew during the year by five per cent to BD2.4 billion.

BBK managed to keep its liquidity and funding positions at very comfortable levels with liquid assets (cash and balances with central banks, treasury bills, financial assets at fair value through statement of income, and deposits and due from banks and other financial institutions) to total assets standing at 21.3 per cent (December 2013: 23 per cent), and loan to total deposit ratio at 66.3 per cent (December 2013: 63.9 per cent).

Capital adequacy ratio remained at comfortable levels well above the regulatory requirement.

"As we reach the end of the second year of our current three-year strategic cycle, our solid performance is a very good indicator that BBK is very well positioned to face any challenges that could be imposed by domestic or global markets, while continuing to serve our customers with delight and pride, the best banking services in the kingdom," chief executive A Karim Bucheery said. - TradeArabia News Service




Tags: Bahrain | BBK | increase | profit |

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