Tuesday 11 August 2020
 
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Dr AbdulRahman Saif

BBK posts $77.46m H1 net profit amid Covid impact

MANAMA, 19 days ago

BBK, a leading Bahrain-based bank, has achieved a net profit of BD29.2 million ($77.46 million) for the first half this year, compared to BD40 million in the same period last year, a decrease of 27%. 
 
The basic and diluted earnings per share amounted to 22 fils for the period compared to 32 fils during the same period last year, the bak said.
 
Due to the economic effects of Covid-19 pandemic during 2020, and the global interest rates cut in late 2019,  the bank’s financial performance have been negatively impacted . This has resulted in a decrease of 15.8% in interest income to BD74.8 million during the half year of 2020 (BD88.8 million in the corresponding period last year), while interest expense stood at BD34 million (BD 31.2 million during the same period last year), registering an increase of 9%, partially due to increase in the customer deposits portfolio. 
 
The bank’s share of profit from associated companies and joint ventures decreased from BD4.8 million during the first half of 2019 to BD2.5 million for H1 2020. Furthermore, fees and commission and other income dropped from BD22.1 million achieved during the first half of 2019 to BD20.8 million, a drop of 5.9% largely due to the impact of concessionary measures taken in response to Covid-19 to support the domestic business community. 
 
Operating costs registered a slight decrease of 0.3% to BD30.7 million compared to BD30.8 million reported during H1 2019. 
 
The  cost-to-income ratio (including share of profit from associated companies and joint venture) increased to  48.0% compared to 36.5% reported in similar period last year. In addition, net provision charges reduced from BD13.5 million for the first half of last year to BD4.3 million during the current reporting period.
 
The total comprehensive loss attributable to owners of the bank for the half year ended 30th June 2020 amounted to BD47.8 million compared to a total comprehensive income of BD47.2 million during the corresponding period last year. In addition to drop in net profit, the other comprehensive income was negatively impacted by the reduction in the valuation of the bank’s investments portfolio caused by lower financial assets prices due to the Covid-19 outbreak. 
 
The total shareholders’ equity attributable to the owners of the bank stood at BD439.7 million as of end of June 2020, compared to BD543.9 million as of year-end 2019. The drop of 19.2% is mainly related to negative valuation of investment securities due to market volatility, dividend payment during the year, and impact of concessionary measure taken in response to Covid-19 pandemic to support Bahraini citizens and companies. 
 
The total assets by the end of June 2020 reached BD4,032.9 million compared to BD3,865 million as of the 2019 financial year-end, registering a growth  of 4.3%. 
 
Net loans and advances registered a decrease of 4.1% to reach BD1,602.8 million compared to BD1,670.9 million as at end of December 2019. The bank continued to maintain a very robust liquidity position that is mainly funded by customer deposits. Total customer deposits increased by 9.6% to stand at BD2,376.7 million at end of June 2020 (December 2019: BD 2,169.5 million), while the loans to customer deposits ratio stood at 67.4 % (December 2019: 77.0%).
 
The board of director reviewed the financial results as of 31st June 2020, and decided not to distribute interim dividend for 2020, in line with Central Bank of Bahrain direction in this regard, the bank said.
 
The board said: “The Covid-19 pandemic, and the resulting economic lockdown and market turbulences resulted in unprecedented challenges and the worst comprehensive crisis since the great depression of 1930s. Despite the challenges of the current circumstances, we are confident in our ability to recover from the crisis and support the economies and stakeholders in all societies in which we operate. The Bank, with the support of our shareholders, dedication of the management and employees, and the loyalty of our customers will overcome those difficult times to continue to deliver superior results to its shareholders.”
 
Dr AbdulRahman Saif, BBK’s Group Chief Executive, said: “All economic sectors suffered from the consequences of the current crisis, and banks are no exception. It was predicted for the financials for the first half 2020 to register a decrease compared to same corresponding period of last year. However, the bank has taken numerous measures to minimise the adverse effects of this Covid-19 pandemic including enhancing its quality level. Also, in such a critical time, BBK as a socially responsible organisation, has put in place many measures to support the individuals and business entities most affected by the crisis. In this context, the bank has contributed BD3 million as donation to “Fina Khair” national campaign. With BBK’s solid fundamentals and approach towards a sustainable and balanced growth, the bank hopes to overcome this challenging situation and continue registering growth in future periods.”
 
The board also discussed other important issues such as the business plan for the second half of 2020, strategic initiatives for years 2020 & 2021, reviewing  the bank’s corporate governance framework and procedures and terms of  reference of some of the board committees, and reviewing some of the bank policies. - TradeArabia News Service
 



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