GulfBase GCC Cap Indices
Large Cap4,023 0.80
Med Cap3,850 0.49
Small Cap4,907 0.91
Micro Cap8,519 0.62

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Ticker Price Volume
GFH 0.46 3,578,848
BKSB 0.14 275,822
DSI 0.39 45,711,538
ALINMA 16.5 3,084,810
DAMAC 3.84 686,475
ALKHODARI 10.04 34,083
DANA 0.6 9,001,191

Bank of Bahrain & Kuwait

Source: Taib Bank

Quarterly Result Update

BBK reported a total operating income of BHD 92.56 million during FY09, down 19.3% YoY. The total income was in line with our estimate of BHD 92.00 million.

Net profit increased 29.3% YoY to BHD 35.01 million during FY09, 8.1% higher than our estimate owing to a sharp decline in impairment provisions for investments of non-trading securities.

We are maintaining our FY2010 estimates for total operating income. However, we have raised our FY2010E net profit upward by 0.7% anticipating lower impairment provisions.

We are reiterating our earlier OVERWEIGHT recommendation on BBK with a target price of BHD 0.548, implying an upside of 26.2%. Overview

Operating Income
The bank’s total operating income declined 19.3% to BHD 92.56 million during FY09 from BHD 114.68 million in FY08 due to lower other income partially offset by continued growth in net interest income. During the period, net interest income was up 7.6% to BHD 61.30 million from BHD 56.98 million in FY08, as interest expense plunged 58.0% to BHD 21.13 million compared to a 23.2% decline in interest income to BHD 82.42 million. Net fees and commission income jumped 10.9% to BHD 22.10 million from BHD 19.93 million in FY08. However, share of profit in associated company and joint venture declined 15.5% to BHD 2.66 million.

Net Spread and NIM
The bank’s net spread slipped by a marginal 4 bps to 3.1%, as a result of a 166 bps decline in yield on average interest earning assets outweighing a 162 bps decline in cost of funds. However, NIM remained flat at 3.1%.

During FY09, the bank’s total expenses significantly reduced by 34.5% to BHD 57.18 million from BHD 87.35 million in FY08. The decline in expenses was largely attributable to a considerable decrease in net provisions for impairment of non-trading investment securities to BHD 2.95 million from BHD 44.68 million in FY08.

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