Bahrain-based Bank ABC (Arab Banking Corporation) has posted consolidated net profit of $193 million for the year 2017 as against S$193 million profit reported for the previous year, marking an increase of 6 per cent.
Net profit for fourth quarter of 2017 was $42 million, 27 per cent higher compared to $33 million in Q4 2016.
On a headline basis, total operating income was $869 million against $865 million reported for the last year, and normalises to a 7 per cent growth, after adjusting for effects of foreign currency hedging transactions in Banco ABC Brazil (BAB), which have an offsetting tax charge impact.
Operating expenses were at $462 million,$26 million higher than last year, due to continuing investment costs as well as some currency translation impact.
Impairment charges for the year were $96 million compared with the previous year’s $92 million, resulting from the after impact of recessionary conditions in Brazil although these have been stabilising more recently.
Ratio of non-performing loans to gross loans at 3.5 per cent improved from 2016 year-end levels of 4.1 per cent, and normalises to 2.6 per cent, when legacy fully provided loans are adjusted for.
Tax charge $58 million, compared to the charge of $103 million for 2016 (the variance largely arising from the tax treatment of currency hedges in BAB noted above).
Balance sheet
• Total assets stood at $29.5 billion at the end of 2017, comparable to $30.1 billion at the 2016 year-end, as the Group continues to prioritise asset quality and returns.
• Deposits at the end of the year were $20.2 billion similar to 2016 year-end.
• Customer deposits increased by $2.5billion during the year, resulting from repositioning the composition of liabilities.
• Liquidity ratios strong with LCR and NSFR on a Basel III basis exceeding 100 per cent with comfortable buffer and liquid assets to deposits ratio healthy at 55 per cent.
• Capital Ratios strong: Tier 1 17.7 per cent and total capital adequacy ratio (CAR) 18.7 per cent.
The Board of Directors has recommend, for approval at the Annual General Meeting to be held on March 25 in Bahrain, a cash dividend distribution of 3 per cent of the issued share capital ($0.03 per share), translating to approximately 48 per cent of the net profit for the year, attributable to the shareholders of the parent, amounting to $93.3 million.
Bank ABC's Group chairman, Saddek Omar El Kaber, said: “We are pleased to see the continuing progress of the Group with improved growth in profitability of 6 per cent year on year. This year also saw the expansion of our network footprint to Dubai and Singapore as new branches were opened, underpinning our strategic intent to be Mena’s leading international bank.
“In addition, we are making advances with our digital transformation in a number of areas. We are cautiously optimistic on the positive signals emerging in many of our core markets, which should build momentum into our businesses. Our balance sheet and risk metrics continue to remain one of our key focus areas and benchmark well against regional and international standards.”
Bank ABC is a leading player in the region’s banking industry and provides innovative wholesale financial products and services that include corporate banking, trade finance, project and structured finance, syndications, treasury products and Islamic banking. It also provides retail banking services through its network of retail banks in Jordan, Egypt, Tunisia and Algeria. – TradeArabia News Service
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