Bahrain-based Arab Banking Corporation (ABC) has made a further $234 million provision against the effects of the credit crunch in the third quarter of the year.

This takes the provisions against the crisis to $974 million for the first nine months of the year, said a report in our sister publication, the Gulf Daily News.

That saw the Bahrain-based bank post losses for the third quarter of $194 million, taking year to date losses to $852 million.

In the wake of its experience in global markets the bank is now repositioning itself and concentrating more strongly on expanding its retail and wholesale banking activities.

'ABC has largely concluded the in-depth review of its medium term strategy begun in May, and is now poised to focus efforts on implementing new initiatives to increase revenue generation capabilities,' said ABC president and chief executive Hassan Juma.

'Our banking model is being realigned to focus on international wholesale banking and universal banking across North Africa and the Levant, incorporating into our traditional activities a new emphasis on revenue growth from relationship banking and retail activities.

'At the same time, our shareholders continue to demonstrate their confidence in ABC's future prospects.

'Despite the difficult environment, the continuing increase of earnings clearly demonstrates the success of our strategy over the past few years - focusing on the Arab region and its trade flows.

'Our strengths in wholesale banking activities are complemented by rapidly growing revenues from our universal banking subsidiaries in the Arab World and our new initiatives will further increase our presence and role in the growth of the Middle East and North Africa region.'

He said ABC's operating results over the past three years vividly illustrate the achievements arising from the group's focus on trade flows and projects in the Arab region.

ABC's strengths in trade, project, corporate and Islamic finance have ably serviced the current business expansion in the region, whilst the development of retail, small and medium enterprises and commercial banking activities in the niche markets across North Africa and in Jordan continue to improve earnings capabilities.

Total income for the third quarter of $148 million was in fact 19 per cent higher than the $124 million reported for the same period last year, excluding an exceptional gain of $90 million in July last year from the IPO at ABC's subsidiary, Banco ABC Brasil.

Interest income at $118 million was significantly higher than $82 million for the same period last year from increased volume of loans.

Non-interest income totalled $30 million compared with the $42 million earned last year. Shareholders' equity at September 30 stood at $1,774 million compared with the total of $1,867 million in December last year.

ABC's liquidity remains strong, with the liquid assets to deposits ratio at 65 per cent, compared with 72 per cent at the 2007 year end.

ABC's securities portfolio comprises largely of highly liquid investment grade floating rate notes and securities guaranteed by US government agencies.

'ABC is quite comfortable with its current liquidity situation, and, to ensure that ample funding is available, has been running a daily cash position averaging over $1 billion that is being placed in the overnight interbank market,' Juma said.

ABC's Minimum Liquidity Guideline has been comfortably exceeded over the last several months despite the global inter-bank market effectively drying up.

This has been possible due to the group's ability to repo its high quality securities portfolio at competitive rates.

Loans and advances increased to $13.2 billion from $12.3 billion in December last year, as the lending portfolio continued to<