Ithmaar Bank, a Bahrain-based Islamic retail bank, said it has already started implementing cost-cutting and other strategic initiatives, both in the Bahrain and in Pakistan, aimed at turning the group around in 2014.

These measures are expected to result in savings in the range of $25-$35 million annually, stated the bank chairman Prince Amr Al Faisal, while addressing the shareholders at the Annual General Meeting (AGM) held at the Movenpick Hotel in Bahrain on Sunday (March 30).

“The far-reaching cost reduction initiatives include many aspects of our operations, including Information Technology, Administration and Staff Costs, both at Ithmaar Bank in Bahrain and its subsidiaries, mainly Faysal Bank Limited (FBL) in Pakistan,” said Prince Amr.

“This will allow us to realise the full potential of the powerful synergies created over almost four years of business acquisition and reorganisation within the Group,” he added.

Also present at the AGM were the bank directors Khalid Abdulla-Janahi and Tunku Dato’ Ya’acob Bin Tunku Abdullah (Chairman of the Audit and Governance Committee) besides the representatives of the bank’s Sharia supervisory board, the Central Bank of Bahrain, the Ministry of Industry and Commerce, the statutory auditors PricewaterhouseCoopers, and the Bahrain Bourse.

The AGM welcomed Ithmaar Bank’s increased focus on further strengthening its Islamic retail and commercial banking operations and on continuing towards realising the shared vision of becoming the region’s premier Islamic retail bank.

“In Bahrain, we have already implemented some reorganisation and staff cost rationalization under the Voluntary Separation Programme, and this will significantly reduce the bank’s staff costs going forward,” stated Prince Amr.

“We have also begun implementing several technology-related initiatives that will reduce costs and bring the Bank closer to its customers, as well as further improvements to the Bank’s administration processes that will further improve cost-efficiency,” he said.

Ithmaar CEO Ahmed Abdul Rahim said the immediate implementation of the board’s strategic decisions earlier this year to turn the Group around in 2014 has started, and it has already taken significant steps forward.

"These initiatives, coupled with the consistent growth of our core business, despite challenging local, regional and international market conditions, will contribute to improving the bank’s performance,” remarked Abdul Rahim.

“It will also further improve customer satisfaction and increase shareholder value,” he added.

“In 2013, for example, Ithmaar Bank’s sustained, consistent efforts started paying off with tangible results,” explained Abdul Rahim.

“New products and enhanced services are the key drivers of our business growth, and our increased branch and ATM network has helped extend our reach. This, in turn, has contributed to our improving performance, which includes improved liquidity and increased deposits,” he noted.

Abdul Rahim said the Islamic retail bank had reported a profit of BD1.8 million before taxation and provisions for the year ended December 311, 2013 and a net loss of BD29.9 million after taxation and provisions for the year.

“The positive story for 2013 is that total income for 2013 mainly comprises increased recurring income, though this was impacted by margin compression in FBL, whereas the 2012 income included certain one-off items,” he stated.

“The results of the various strategic and cost rationalisation initiatives that has already started will have a major positive impact on the Bank’s performance in 2014 and thereafter,” he added.-TradeArabia News Service