Bahrain-based regional investment bank, Securities & Investment Company (SICO) said its full year net profit for 2011 plunged to BD488,000 ($1.29 million) from BD3.78 million the previous year.

Announcing its financial results for the year ending December 31, 2011, SICO said the bank's operating income stood at BD4.63 million compared to BD7.85 million for the previous year. The basic earnings per share too fell to fils 1.145 versus fils 8.9 in 2010.

The bank's operating income for the fourth quarter fell to BD1.82 million from BD2.625 million for the same period in 2010.

Total expenses for the quarter in 2011 were BD969,000 compared to BD1.115 million for the same period the year before.

The net profit for the quarter too plunged to BD852,000 from BD1.51 million in the final quarter of 2010.  The basic earnings per share were 2 fils for the quarter, compared to 3.55 fils the year before, the Bahrain bank said in its statement.

Total assets at year-end contracted to BD70.63 million from BD81.23 million year-end 2010, the statement added.

However assets under management grew to BD206 million, up from BD201 million the previous year, while assets under custody with the Bank’s wholly-owned subsidiary – Sico Funds Services Company (SFS) – dropped to BD864 million, from BD 1.28 billion in 2010, reflecting market-driven declines in net asset values.

SICO said it continued to maintain a strong capital base, ending the year with BD53.88 million in shareholders’ equity and a very solid consolidated capital adequacy ratio of 73.8 per cent, which is considerably higher than Central Bank of Bahrain’s requirements.

The bank currently has 28 per cent (or BD19.96 million) of its balance sheet in cash and deposits, reflecting the continued prudent position adopted with regard to capital markets.

Commenting on the results, chairman Shaikh Abdulla bin Khalifa Al-Khalifa said, "2011 proved to be considerably more testing than expected for all financial institutions, particularly in the investment area, with the Bank responding proactively to the weak environment, and posting a commendable overall performance."

"In a year that was not dissimilar in many respects to 2008, the Bank’s performance was achieved against an unnerved global economic background, with unprecedented levels of volatility in regional and international capital markets," he stated.

"Nonetheless, the GCC’s economies, although not immune to these challenges, continued to weather the worst consequences of the continued global financial crisis," said Shaikh Abdulla.

"The stability of oil and strong pro-cyclical economic measures undertaken by GCC governments countered much of the impact of adverse global macroeconomic challenges," he added.

CEO Anthony Mallis said, “Despite very difficult market conditions and the consequent roller-coaster impact on our results over the past four quarters, our team continued to capture new opportunities in 2011, while controlling costs carefully. Our annuity activities helped to offset a drop in investment income from our trading activities."

"In parallel, the Bank maintained its research activities in contrast to many international and regional peers that have condensed this important service to investors."

Looking ahead, Mallis said, “With our strong financial position, continued focus on preserving capital, and a tested management team with a successful track record, our firm is well positioned to capture new business opportunities once markets recover, and continue providing shareholders with an acceptable risk-adjusted return."

"The board is cautiously optimistic about the Bank’s prospects in 2012, although it is recognised that it will be another tough year," he added. -TradeArabia News Service