VCBank swings to $21m net profit
Manama, August 26, 2013
Bahrain-based Venture Capital Bank (VCBank) has reported a net profit of $21.1 million for the 18 month-period ended June 30, 2013 compared with a loss of $58.7 million for the calendar year 2011.
The net profit for the period is after fair value losses of $7.3 million and impairment charges of $4.1 million booked as a prudent measure in the light of current market conditions, said a statement from VCBank.
The Islamic investment bank also registered a $1 million net profit for the quarter ended June 30, 2013 compared to a net loss of $4.5 million for the corresponding quarter ended June 30, 2011.
These results are after recognition of fair value losses and impairment allowances totaling $11.4 million for the 18 month-period including $6 million in the quarter ended June 30, 2013, it stated.
The Bahraini bank also witnessed its total revenue jump 485 per cent on an annualized basis to $43.9 million for the period with income from investment banking activities rising significantly to $35 million compared to $3 million for 2011.
Concurrently, total expenses decreased by 27 per cent on an annualized basis to $15.9 million for the 18 month period as a result of cost reductions and organizational improvements instituted by the board and management in response to the challenging current market conditions, it stated.
The bank’s balance sheet has continued to see good improvement with total assets increasing to $221.6 million as at 30 June 2013 compared to $198.5 million at the end of 2011 whilst continuing to remain unleveraged.
The shareholders’ equity has grown by 8 per cent on an annualized basis to $200.5 million at 30 June 2013 from $179.7 million at 31 December 2011, the Bahrain-based bank said in its statement.
Commenting on the performance, board chairman Dr Ghassan Ahmed Al Sulaiman said the results highlighted the significance of strong contribution to total income from investment banking activities which has grown by 12 times to $35 million for the period compared to $3 million in 2011, representing an annualized growth of almost 8 times.
"These encouraging results have been achieved despite the very challenging conditions being faced by the banking sector in the region and the investment banking sector in particular," stated Al Sulaiman.
"The bank’s results confirm the feasibility of our new plans and strategies that includes restructuring the investments and focusing on venture capital and private equity sector in the Mena region. Additionally, it supports and confirms our commitment to provide shareholders and investors with acceptable rates of return," he added.
CEO Abdullatif Mohamed Janahi pointed out that VCBank had achieved six consecutive quarters with impressive results in 2012/13 and is going forward to the year ahead with strength and confidence.
"These results affirm that the bank is moving in the right direction towards achieving strong growth and underlines the success of our strategic focus on key sectors in which we have built particular expertise, such as healthcare, agribusiness, oil and gas, and shipping; and in the more economically and politically stable markets in the region," he added.-TradeArabia News Service