Arab Banking Corporation (ABC) has reported a 27 per cent increase in consolidated net profit for the first quarter at $71 million, compared with $56 million registered in the first quarter of last year.

The business volumes grew in line with expansion plans, resulting in improved revenues across all the geographies that ABC operates in, reported the Gulf Daily News, our sister publication.

However, currency translation from the stronger dollar resulted in a two per cent decline in operating income for the quarter to $226 million compared with the first quarter of last year.

Operating expenses at $103 million decreased by $10 million resulting in cost to income ratio of 46 per cent, a decline of three per cent, benefiting from the restructuring initiatives taken last year, besides the impact of currency translation.

Recoveries and continued vigilance over asset quality resulted in net impairment provisions of $8 million, lower than the previous year's $28 million which was impacted by some exceptional provisions.

ABC Group's total assets stood at $27.9 billion at the end of the first quarter compared with $26.5 billion at last year-end, reflecting growth in loan volumes and other short-term liquid assets.

The ratio of non-performing loans to gross loans declined to 2.7 per cent from 3 per cent at last year-end.

Deposits increased by $1.2 billion during the quarter to $19.5 billion.

Liquidity continues to be at comfortable levels with liquid assets to deposits ratio at 62 per cent.

Shareholders' equity at March 31 stood at $3,897 million following the distribution of 5 per cent dividend to the shareholders.

ABC Group's capital adequacy ratio at 21.3 per cent was above the regulatory minimum (12 per cent) and comprised predominantly tier 1, which totalled 17.7 per cent.

"I am pleased with the excellent start to the year following the steadily growing results of the last five years," ABC chairman Saddek El Kaber said.

"With continued emphasis on planned expansion I am confident that ABC Group will continue to flourish despite the challenging environments that some of the ABC units operate in," he added.-TradeArabia News Service