Bahrain-based Ithmaar Bank, a leading Islamic, retail-focused bank, has recorded a net profit attributable to shareholders of $4.6 million for the first half of the year against a loss of $47.6 million in 2009.

It is Ithmaar's first financial reporting as an Islamic retail bank following its successful reorganisation in April with its then wholly-owned subsidiary, Shamil Bank.

'On behalf of the Ithmaar Bank board I am pleased to report that the bank continues to report profits, despite challenging market conditions,' said chairman Prince Amr Mohammed Al Faisal.

'The bank's year to date results, the first to be reported under the standards issued by the Accounting and Auditing Organisation for Islamic Financial Institutions that govern financial reporting by Islamic retail banks, indicate that our core retail and corporate banking activities remain a stable source of recurring income.

'Ithmaar's half year financial results show a net profit of $8.3 million, of which $4.6 million is attributable to shareholders of the bank. This compares to a loss of $49.6 milion for the same period last year, and reflects the bank's growing success after having overcome the challenges created by the global financial crisis,' he said.

Chief executive and director Mohammed Bucheerei said that following its transformation into an Islamic retail-focused bank, Ithmaar has focused on further strengthening its interbank relationships and on growing its customer accounts.

He said that since its reorganisation it had re-established several interbank lines and institutional relationships that have helped diversify the bank's liquidity base and introduced new customer-focused products and services that have helped increase the customer base.

'Ithmaar Bank's balance sheet continues to remain strong at $5.7 billion and total shareholders' equity at $789m,' he said. 'Ithmaar has also continued its policy of adopting prudent impairment provisions on financing and investments.

'Ithmaar's half-year results, made all the more significant by the challenging market conditions in which we operate, reflect the success of bank's efforts to develop its core retail and corporate banking business. Total income remains strong at $108.9 million, compared to $75.7 million for the same period last year, and includes a gain of $24.1 million on the sale of investment to a related party.

'In addition to developing our corporate banking activities by establishing new institutional relationships, we have also developed our retail banking activities with unrestricted investment accounts improving significantly, by 25 per cent, to $1.2 bilion.'

'Since our transformation into an Islamic retail-focused bank, Ithmaar has also undertaken steps to exit from certain non-strategic investments which will enable the bank to redeploy funds towards further strengthening its core retail and corporate banking business,' he added.

'This will allow us to further amplify our efforts both on expanding Ithmaar's range of retail products and services as well as its delivery channels and on extending the bank's geographical reach across the GCC region by offering a wide range of corporate banking services.

'Ithmaar is, for example, currently implementing a retail banking expansion plan as part of our board-approved business plan.

'This expansion plan will see Ithmaar adding two new branches, as well as seven new ATMs to its retail banking network.' – TradeArabia News Service