29/02/2016 08:54 AST
Ithmaar Bank, a Bahrain-based Islamic retail bank, announced it has seen an increase in total income and operating income from core retail banking operations last year.
However, it said the improved performance was impacted by recognition of certain investment related impairment provisions.
Net income before provisions for impairment and overseas taxation increased 169.2 per cent including an 18pc increase in operating income.
Overall, the bank recorded a net loss of $46.4 million last year, as against a net loss of $8.8m in 2014.
This was mainly due to significant impairment provisions of $95m last year, compared with provisions of $26.1m in 2014.
Net loss attributable to equity holders was $60.8m in 2015, compared with net loss of $15m in the previous year.
The results include a net loss of $57.8m for the fourth quarter last year, as against a net loss of $13.7m for the same period in 2014.
Net loss attributable to equity holders for the quarter amounted to $62.9m, compared with net loss of $16.2m for the same period of the previous year.
Chairman Prince Amr Al Faisal said the bank continues to report growing, sustainable income from core retail banking operations.
“Net income, before provisions for impairment and overseas taxation, increased 169.2pc to $77.9m last year, from $28.9m in 2014.
“This included a 17.8pc increase in operating income to $268.4m last year, up from $227.8m in 2014.
“This was mainly due to sustainable revenue growth across most income streams,” he said.
“However, the recent significant decline in oil prices and the resultant new economic challenges in the region have impacted investment valuations, and consequently impacted results,” said Prince Amr.
“To address this, the bank has taken prudent investment impairment provisions, and the net loss for the year is due largely to significantly higher provisions for impairment, which increased by $68.9m,” he said.
“Total expenses at $190.4m, are 4.2pc lower than 2014 expenses of $198.8m, despite the expansion of the core retail banking operations,” said Prince Amr.
“The reduction is, largely, a result of strategic decisions taken in early 2014 that aimed at significantly transforming operations,” he said.
Total assets increased by 3.5pc to $8.1 billion as of December 31 last year when compared with $7.9bn as of December 31, 2014.
Chief executive Ahmed Abdul Rahim said the financial results illustrate the adverse impact that the bank’s investment assets have had on the core retail banking business.
“The stable, sustainable growth achieved in the core retail business is evident with total income increasing 5.4pc to $478.4m last year, when compared with $453.9m in 2014,” said Mr Rahim.
“During the year, the equity of unrestricted investment account holders grew by 10pc to $2.2bn as of December 31 when compared with $2bn as of December 31, 2014.
Similarly, customers’ current accounts have increased by 4.6pc to $1.4bn as of December 31 last year, when compared with $1.37bn as of December 31, 2014, due to the focus on attracting low-cost deposits.
Liquid assets, as of end-December last year, account for 10.6pc of the balance sheet, compared with 9.3pc as of December 31, 2014,” said Mr Rahim.
Gulf Daily News
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