National Bank of Bahrain (NBB) has reported a 1.3% increase in its net profit attributable to equity shareholders to BD15.6 million ($41.4 million) for the three months ended 31 March 2021, compared to BD15.4 million ($40.8 million) last year.

 

The increase in net profit is predominantly due to lower provisioning levels this year, as 2020 included precautionary provisioning requirements attributable to the worldwide Covid-19 pandemic. 

 

Furthermore, 2021 results underscore the strong group fundamentals given the significant market changes that have occurred subsequent to the first quarter of the previous year.

 

Basic and diluted earnings per share at 8 fils ($2 cents) for the first quarter remained at the same level of the same period of 2020. 

 

Total comprehensive income attributable to NBB’s equity shareholders for the quarter increased to BD16.1 million ($42.7 million) compared with a comprehensive loss attributable to NBB’s equity shareholders of BD39.3 million ($104.2 million) in the same period of 2020. 

 

The increase is predominantly attributable to the mark-to-market movements of the Bahrain Sovereign bond portfolio.

 

NBB said its operating income decreased by 3.5% in the first quarter to BD38.9 million ($103.2 million) compared with BD40.3 million ($106.9 million) in the prior year period, largely impacted by lower fees and margins following the Covid-19 pandemic, which did not impact the revenues of the first quarter of 2020. 

 

The group’s total equity attributable to owners decreased by 3.6% to BD500.8 million ($1.33 billion) following the distribution of the 2020 cash dividends, compared with BD519.7 million ($1.38 billion) recorded as of 31 December 2020. 

 

The group’s total assets increased by 0.6% to BD4.39 billion ($11.6 billion) compared to BD4.36 billion ($11.5 billion) recorded on December 31, 2020. The increase was attributable to higher placements and a continued strong demand for NBB loan products. 

 

Commenting on the performance, Chairman Farouk Yousuf Khalil Al Moayyed said: "We are very pleased with our overall financial results for the first quarter of the year, which demonstrate positive growth despite the effects of the pandemic on the global economic environment."

 

"Our net profits have shown an increase from the same period in 2020, and the Group’s balance sheet remains strong by showing a growth since December 2020, supported by an increased demand for NBB loans throughout the quarter," noted Al Moayyed. 

 

"The acquisition of majority stake in Bahrain Islamic Bank (BisB) in 2020 continues to be a strategic move, with the integration serving to highlight a strong liquid balance sheet to protect both banks," he stated. 

 

"We have also witnessed a strong year in terms of deals and partnerships, namely our ongoing collaboration with the Ministry of Housing and Eskan Bank to promote accessible housing solutions to the kingdom’s population, alongside taking part in a number of national initiatives throughout the quarter," he added. 

 

Al Moayyed said that NBB remained committed to supporting its individual and business customers during these times, in line with the Central Bank of Bahrain and the loan deferral initiatives set to last into the second half of 2021. 

 

"This quarter also saw NBB release its first Annual Financial and Sustainability Report for the year 2020, in a step to fulfil stakeholder need for a coherent and consolidated performance information report linking sustainability concerns with traditional core business activities, as the Bank continues on its journey towards adopting a more sustainable approach in accordance with international ESG standards and best practices. I am pleased to say that the NBB Group is performing well this quarter thus far, and we will continue to move forward with our growth plans to reach new levels of banking excellence, he added.

 

CEO Jean Christophe Durand said: "NBB’s financial performance during the first quarter of the year has been positive, recording a 52.9% increase in net profit attributable to the shareholders of the bank to BD15.6 million ($43.4 million) compared to a net profit of BD10.2 million ($27.1 million) in the last quarter of 2020, despite the unstable market conditions witnessed not only across the kingdom, but also the world,  which have impacted all banks and companies directly or indirectly."

 

"These results come despite the drop in market rates which have had a significant impact on profit growth and margins. Our strong positioning in the market enabled us to expand our product and services portfolio by strengthening our partnerships, both locally and regionally, as we continue to form solid relationships to enhance our performance," stated Durand. 

 

"The first quarter saw NBB introduce special financing packages for properties located in Diyar Al Muharraq, and provide an exclusive offering of the second phase of the ‘Deerat Al Oyoun’ project, in line with our brand promise of staying close to our customers," he explained. 

 

"Additionally, we launched a joint housing product in conjunction with the Ministry of Housing and Eskan Bank to facilitate home purchasing across the kingdom," he added.