Bank ABC Islamic has announced that its net profit for the first half of 2020 was $14.5 million compared to $18.9 million reported in the first half of last year.

 

Total operating income rose to $23.4 million, 5% higher compared to the first six months of last year of $22.3 million.

 

Operating expenses were $3.6 million compared to $3.8 million for the same period of last year.

 

Impairment charges for the period were $5.1 million compared with a write back of $0.7 million reported during last year and are largely in line with our expectations for cost of credit.

 

ABC Islamic Bank’s total assets stood at $2.309 billion as of June 30, 2020 compared to $2.079 billion at 2019 year-end. 

 

Shareholders’ equity as at 30 June 2020 stood at $279 million compared to $365 million at 2019 year-end. The decrease is mainly due to the $100 million dividend payment to the shareholders made during the period.

 

The bank’s capital base remains very strong with a capital adequacy ratio of 32.3%, predominantly Tier 1, which totalled 31.3%.

 

Hammad Hassan, Managing Director of Bank ABC Islamic, said: “After a very strong performance in 2019, we started 2020 with positive momentum and a solid client transaction pipeline. Covid 19 pandemic became a reality by March this year, impacting our clients across most industries and sectors. The situation deteriorated as the year progressed and was further exacerbated by the oil price crisis.  Despite these challenges, the bank’s total operating income grew by 5% compared to same period last year. 

 

"This was primarily at the back of continued momentum from last year and closure of key capital market transactions that were led by the bank.  Despite the growth in operating income, our net profit for H1 declined to $14.5 million as compared to $18.9 million for H1 2019. The reduction in profitability was mainly on account of net increase in Expected Credit Losses (ECL charge). The increase in ECL during this period was a combination of a specific provision related to a client fraud in UAE combined with forward looking IFRS9 ECL. In making estimates for the latter, the group and bank have stress tested the macroeconomic factors conservatively in our ECL model," he said.

 

"Safety of our staff and continuity of business operations continue to remain the group’s and bank’s key priorities during these difficult times. In compliance with the guidelines from the Ministry of Health and the directives from the Central Bank of Bahrain, the bank has been running its operations to ensure staff safety and has provided adequate assistance to clients that required payment relief on account of difficulties faced during the pandemic in line with CBB guidelines.  

 

"As we live through these uncertain times, we continue to monitor the Covid-19 pandemic and related risks, which may have prolonged or longer lasting effects on economic conditions. However, we have a strong balance sheet and are well capitalised with CAR of 32%.  We continue to stress test and monitor our portfolio carefully on a constant basis and are committed to providing continued support to our customers in these difficult times," Hassan added. - TradeArabia News Service