Al Baraka Banking Group (ABG), a Bahrain-based Islamic bank, has reported a three per cent increase in net profit at $69 million for the first quarter ended on March 31, when compared with $67 million for the same period last year.

A statement said total operating profit was 12 per cent higher at $238 million during the quarter under review when compared with the first quarter last year, said a report in the Gulf Daily News (GDN), our sister publication.

After deducting all operating expenses which increased by 6pc, net operating income amounted to $101 million, increasing by 20 per cent.

This reflects increases in income from core businesses and the success of the group to diversify its income from fees, commissions and banking services, the bank said.

Net income attributable to equity holders of the parent reached $40 million, an increase of nine per cent.

Balance sheet items were affected by the devaluation of currencies in countries where ABG has operations, with total assets decreasing by one per cent to $23.1 billion.

Without calculating for these effects, the total assets would have increased by six per cent to $24.8 billion.

Operating assets (financing and investments) amounted to $17.7 billion as of March-end compared to $17.6 billion as of December-end.

Customer accounts decreased by two per cent from $19.9 billion to $19.4 billion.

Total shareholders' equity amounted to about $2 billion as of March-end.

“The results reflect success in maintaining growth, due to diversification in income sources which grew despite the effects of currencies devaluation,” ABG chairman Shaikh Saleh Abdullah Kamel said.

During the quarter, political and economic tensions continued in a number of countries where ABG operates, as did the decline in oil prices, fluctuation in monetary and financial conditions and regulatory developments, he said.

“All these had an impact on the banking environment and banks adopted more cautious business strategies.”

According to ABG board member, president and chief executive Adnan Ahmed Yousif, the contribution of all banking units in the growth of group profit as well as co-operation between units in trade financing activities for Mena countries have increased.

“We intend to open another 54 new branches this year to consolidate and expand our operations, which would result in huge expenses,” he said.

“However, the returns in terms of profits, income, growth and expansion will be very positive and be seen in the coming years.”

He said the group, during the past months, has been working on unifying the IT network amongst units and modernising the institutional, human and technical infrastructure.

Plans and initiatives include entering new markets, launching new products and services, improving internal operating environment technically and professionally and increasing inter-unit business, he said.

ABG currently has a presence in Turkey, Jordan, Egypt, Algeria, Tunisia, Sudan, Bahrain, Pakistan, South Africa, Lebanon, Syria, Iraq and Saudi Arabia, including two representative offices in Indonesia and Libya. The bank's authorised capital is $1.5 billion, while total equity is about $2 billion. - TradeArabia News Service