Ithmaar Bank, a Bahrain-based Islamic retail bank, expects to return to profitability this year, chief executive Ahmed Abdul Rahim said yesterday (March 31).

He said that efforts to turn the group around are paying off, as is evident from the growth in the operating profits of 14 per cent last year, reported the Gulf Daily News (GDN), our sister publication.

Abdul Rahim was speaking on the sidelines of the bank's annual general meeting (AGM) held at the Ramee Grand Hotel, Seef.

Net loss last year of $15 million, after impairment provision and taxation, is significantly lower by 81 per cent when compared with $80.3 million in 2013, he said.

Net profit before the impairment provision and taxation was $28.9 million last year as against $4.8 million for 2013.

The chief executive said key initiatives were taken last year aimed at turning the group around by "significantly transforming operations, increasing revenue, improving margins, divesting non-core assets and reducing costs."

"Ithmaar Bank's financing business in Bahrain increased by 23 per cent, from $745 million at the end of 2013, to $914 million at the end of last year," he said.

Growth was driven mainly by home financing which increased by 53 per cent and personal financing which increased by 21 per cent.

Similarly, total customer current accounts, savings accounts, Thimaar and unrestricted investment account deposits, increased by 11 per cent from $1.38 billion at the end of 2013, to $1.54 billion at the end of last year, he said.

Earlier, Ithmaar Bank chairman Prince Amr Al Faisal told shareholders that the improved financial performance was mainly due to sustainable growth in core retail banking operations, evident in growth of operating income which increased by 14 per cent to $227.7 million from $199.9 million in 2013.

"Despite growth in business, total expenses for the year at $198.8 million are under control and are 1.9 per cent higher than 2013 expenses of $195.1 million,” he said.

Total assets increased by six per cent to $7.86 billion as at December 31, when compared with $7.4 billion as at December 31, 2013.

"The increase in customer balances reflects growing customer confidence as well as demand for products and services," he added.

At the AGM, shareholders also voted to adopt the proposed Staff Variable Remuneration Policy Framework, which was developed to comply with the Sound Remuneration Practices issued by the Central Bank of Bahrain. - TradeArabia News Service