The National Bank of Bahrain (NBB) saw its net profit for the first half of 2010 slip 9.1 per cent to BD23.26 million ($61.7 million), but its chairman said he was satisfied with the result given the current challenging business environment.

The bank achieved a net profit of BD25.60 million for the same period last year, said chairman Abdulla Ali Kanoo.

In the second quarter it recorded a net profit of BD10.04 million ($26.6 million) compared to BD11.90 million for the same period in 2009.

'The overall financial performance of the bank continues to be steady given the current environment,' chief executive officer Abdul Razak Abdulla Hassan Al Qassim said.

'Profitability indicators remained strong with an annualised return on equity of 19.3 per cent and return on asset of 2.1 per cent. NBB continues to benefit from its prudent risk management, outstanding asset quality and sound liquidity position.

'The reaffirmation of all ratings by Capital Intelligence during the current quarter is a further testimony to our sound financial position. Our strong liquidity position coupled with a good growth in the deposit base places us in an advantageous position to capitalise on new business opportunities as they emerge in the future.'

The net interest income for the six months was BD23.48 million compared to BD25.14 million for the same period last year.

The decline in the net interest income is attributable to lower yield on surplus liquidity consequent to a fall in market interest rates. Other income increased by 2.8 per cent to BD13.69 million. Income from core business activities continues to show growth as a result of an increase in the underlying business activities.

Operating expenses increased marginally from BD12.69 million.

The bank continues to focus on the active sectors of the domestic economy while selectively seeking regional business. As a result, loans and advances stood at BD1.107 billion, compared to BD1.153 billion last year.

An enlarged and diversified customer base led to a strong growth in customer deposits, which increased from BD1.433 billion to BD1.826 billion, a growth of 27.4 per cent. The bank's investment securities portfolio was BD476.76 million compared to BD 376.21 million. Earnings per share for the six months of this year was 29.9 fils compared to 32.9 fils for the six months of last year. – TradeArabia News Service