ABC Islamic Bank has announced a net profit of $8.1 million for 2011, posting an increase of 293 per cent over the same period last year.

Annoucing the results, ABC Islamic bank said its total operating income was $15.1 million compared to $15.9 million for 2010, mainly due to de-risking of balance sheet asset size.

The operating expenses rose to $6.2 million compared to the previous year's $4.9 million, mainly due to a timing recognition of staff expenses related to compensation for last year.

The Islamic bank said the impairment provision of $0.5 million for regional exposure was taken during the year compared to $8.6 million for the previous year. Net profit for the fourth quarter was $1.4 million compared to $1.6 million in the third quarter.

The capital base remained very strong with a capital adequacy ratio of 27.5, predominantly Tier 1, which totalled 26.5 per cent.

The shareholders’ equity at December 31, 2011 stood at $227.7 million, compared to $219.8 million at 2010 year-end, it added.

ABC Islamic Bank’s total assets declined to $1.035 billion at 31December 2011 from $1.241 billion at year-end 2010.

Commenting on the results,  Naveed Khan, the managing director of ABC Islamic Bank said, 'Despite our continued effort to deleverage the balance sheet in order to reduce concentrated exposure and timing adjustments in expense items, the underlying core profitability of the bank has delivered a robust performance in a highly challenging year for the Group.'

'This was made possible due to booking new relationships at higher spreads in target markets and also leading syndicated transactions at attractive fee levels,' said Khan.

'The broad product range of the bank and its high-quality relationship banking allowed the bank not only to book new relationships in traditional target markets, but more importantly penetrate markets like Turkey by way of arranging syndicated transactions for a select group of Islamic Banks with strong linkages to GCC markets,' he adde.

On the 2012 outlook, Khan said, 'We are optimistic. ABC Islamic Bank expects to grow its financing activity selectively, as a result of both its recent drive to win new clients, and a gradual recovery in the borrowing appetite of customers.'

'In addition, the bank intends to intensify its cooperation with ABC Group’s expanding Mena subsidiaries by rolling out its expertise in Islamic product support for their core customers,' he added.-TradeArabia News Service