Al Baraka Islamic Bank net income soars 249 per cent in first nine months of 2011

Al Baraka Islamic Bank, a subsidiary banking unit of Al Baraka Banking Group, announced that it continued to achieve excellent results during the first nine months of 2011. The financial statements of the bank for the first nine months of 2011 show that net income has amounted to BHD 1.36 million ($3.6 million) during the first nine months of 2011 compared to BHD 388 thousand ($1,029 million) during the same period of 2010, a significant increase of 249 per cent.

This reflects a substantial improvement in the total income of the bank which amounted to BHD 12.09 million ($32.2 million), compared to BHD 8.25 million ($21.9 million) during the first nine months of 2010, an increase of 46.54 per cent. After deducting all operating expenses, net operating income amounted BHD 1.06 million ($2.8 million), which represents a drop of 22.35 per cent down from its level during the same period of 2010.

The improvement in net income reflects an increase of the bank’s business in Bahrain and Pakistan, improvement in the quality of income-generating assets and a reduction in non-performing financing as well as an increase in income from foreign trade financing and from arranging financing deals.The bank also announced an increase in total operating income by 46.54 per cent and net income by 249 per cent during the first nine months of 2011 compared to the same period of 2010.

The statements also show that total assets have increased by 7.49 per cent, finance and investments portfolio by 8.87 per cent and total deposits by 8.52 per cent as at the end of September 2011 compared to their levels in December 2010. These results are a testimony to the soundness of the Bank’s business strategy and to the growth of its activities in all areas of its operations, especially in its two key markets, Bahrain and Pakistan. The results are also a testimony to the steady improvement in the economic conditions of the kingdom.

The financial statements for the first nine months of 2011 also show that total assets have increased by 7.49 per cent to BHD 545.7 million ($1.4 billion) as at the end of September 2011 in comparison with December 2010, as a result of growth in the bank’s business in Bahrain and Pakistan, which in turn was reflected positively on all key items of the balance sheet.

Deposits and investment accounts increased by 8.52 per cent to BHD 464.4 million ($1.2 billion) while the finance and investments portfolio has increased by 8.87 per cent to BHD 427.7 million ($1.1 billion) as at the end of September 2011 compared to December 2010, as a result of arranging new finance transactions and increased financing of foreign trade and consumer finance. Total shareholders’ equity amounted to BHD 69.2 million ($183.5 million) as at the end of September 2011.

As for the results of the third quarter of 2011, net income amounted to BHD 75 thousand ($198,912) compared to BHD 484 thousand ($1,283) for the same period in 2010, a drop of 74.5 per cent as a result of an increase in operating expenses, while total operating income rose by 25.8 per cent to BHD 3.69 million ($9.7 million) during the third quarter of 2011 compared to the same period in 2010.

Meanwhile, the international well-known rating agency Capital Intelligence re-affirmed in early August 2011 the credit rating of Al Baraka Islamic Bank as it maintained its BB + rating for long-term foreign currency obligations and A3 for short-term foreign currency obligations with a stable outlook.

According to the agency, this rating reflects the good quality of the bank’s assets, its strong capital base, adequate liquidity and high capital adequacy ratio as well as the strong support that the parent company, Al Baraka Banking Group, affords to the bank.

Chairman of the Board of Directors of Al Baraka Islamic Bank Khalid Rashid Al Zayani said, “We are delighted to see continuing improvement in the performance of Al Baraka Islamic Bank in this year, which was a truly difficult year as unfavourable global and regional economic and financial conditions continues.

These results were achieved firstly by the Grace of Allah, and then by the outstanding efforts made by the bank in expanding its activities and business at all levels based on the flexible and diverse business strategies that it had launched last year and which included a number of initiatives in the area of product diversification, expansion of branch network, enhancement of foreign trade financing and other initiatives that have had good impact on the results of the Bank during the first nine months of 2011.

Also, the steady improvement in the performance of the Bahraini and Pakistani economies helped the Bank’s efforts in expanding its business and improving its financial results.” Adnan Ahmed Yousif, Vice Chairman of Al Baraka Islamic Bank and President & Chief Executive of Al Baraka Banking Group, said that “the bank has continued during the past months to implement a series of initiatives that had clear positive effects on the Bank’s performance during the first nine months of 2011.

The conversion of the Bank’s branches in Pakistan to an independent Islamic commercial bank following the merger with Emirates Global Islamic Bank in Pakistan and our hard work to turnaround these branches to profitability had an evident positive effect on the operations of Al Baraka Islamic Bank.

As a result of the merger and thanks to the bank’s long experience in this market and the strong support that the parent company, Al Baraka Banking Group, affords to it, Al Baraka Islamic Bank was able to continue to expand and grow its operations in Pakistan in spite of the difficult economic conditions prevailing there. In Bahrain, we continued our concerted efforts to launch new products and services, open more branches, strengthen our capital resources and continue build the human and technical resources of the bank. All these factors had helped in achieving the good results of the Bank during the first nine months of 2011.”

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