Bank ABC (Arab Banking Corporation) today announced that its consolidated net profit, attributable to the shareholders of the parent, for the first half of the year 2017 was $102 million.
These results compare positively compared to the net profit of $101 million reported for the same period last year, benefitting from strong performance in all core businesses.
Net profit for the second quarter was $52 million, 13 per cent lower than the $60 million reported for the same period last year, to some extent impacted by higher impairment provisions, the bank said.
Total operating income was $432 million, broadly in line with the $442 million reported in the first half last year. Operating expenses at $224 million were slightly higher than last year, mainly impacted from currency translation as well as flow through costs on investments in the previous year. Net impairment provisions for the six-month period ended June 30 2017 at $50 million were higher than the previous year’s $36 million. The increase was primarily from the bank’s Brazilian subsidiary, Banco ABC Brasil, which continues to be impacted by some flow through from the recessionary conditions of the Brazilian economy, although the charge remains in line with the bank’s expectations for the period and is significantly lower than Brazilian peer banks.
Conversely, the group ratio of non-performing loans to gross loans remained at 2016 year-end levels of 4.1 per cent. The tax charge was at $26 million, compared to the charge of $71 million for the same period last year, the variance largely arising from the tax treatment of currency hedges.
Bank ABC Group’s total assets stood at $29.2 billion at the end of first half of 2017, comparable to $30.1 billion at the 2016 year-end. The bank continues to prioritise asset quality and return, while maintaining liquidity and capital strength.
Deposits at the end of the period were $21.3 billion higher than the $20.2 billion at 2016 year-end.
The group’s liquidity position continues to be at comfortable levels with the liquid assets to deposits ratio at 63 per cent, lower than the 68 per cent at the year-end 2016 reflecting the increase in the deposits.
Shareholders’ equity at June 30 2017 stood at $3,848 million after the distribution of 3 per cent dividend to the shareholders. Group consolidated total capital adequacy ratio (CAR) remained strong at 19.2 per cent, comprising predominantly Tier 1 at 18 per cent.
Bank ABC group chairman Saddek Omar El Kaber said: “The results are steady and in line with our expectations. This is a positive sign and a testament for our diversified group businesses. Whilst market conditions in Brasil continue to be challenged, our operations in Brasil has shown resilience and our core businesses in other countries have performed well. Our proactive risk and balance sheet management is bearing fruits, with our key health indicators measuring exceptionally well against International standards.”
Bank ABC is a leading player in the region’s banking industry and provides innovative wholesale financial products and services that include corporate banking, trade finance, project and structured finance, syndications, treasury and financial markets products and Islamic banking.
It also provides retail banking services through its network of retail banks in Jordan, Egypt, Tunisia and Algeria. – TradeArabia News Service
