The strategy at Bahrain-based Securities & Investment Company (SICO) remains focused on maintaining a strong balance sheet in order to take advantage of opportunities and capitalising on further market recovery expected to continue in 2012.
That was the message from chief executive Anthony Mallis as the company bounced back into the black in the first quarter.
SICO earned a net profit of BD1.351 million ($3.6m) for the first quarter of 2012, compared with a loss of BD627,000 in the first three months of last year.
Net interest income during the period increased to BD309,000 against BD232,000, while fee and commission income declined to BD548,000 from BD565,000.
Brokerage and other income fell to BD168,000 from BD316,000.
Net investment income stood at BD1.527m against a loss of BD654,000 in the first quarter of 2011.
Thus operating income significantly increased to BD2.552m from BD459,000 with earnings per share growing to 3.17 fils, against a loss per share of 1.5fils for the same period the previous year.
As a result of the bank taking a more positive view of the market environment.
The balance sheet was re-leveraged during the past three months, so by the end of the first quarter, total assets increased to BD99.7m while total liabilities increased to BD43.1m.
SICO maintained a strong capital base ending the quarter with BD56.5m in shareholder equity compared to BD53.9m as of December 31.
SICO's outlook continues to be prudent, and its strategy remains focused on maintaining a strong balance sheet in order to take advantage of opportunities and capitalise on a further market recovery, expected to continue in 2012, also taking into account any possible turbulence that the capital markets may face going into the year.
"While the environment for the bank's investments was more settled, some of the business lines did not see a sufficient recovery for the quarter, although we also started to observe a noticeable turnaround in brokerage and asset management activities which we believe will contribute to the rest of the year's revenue flow," said Mr Mallis.
"Despite the fact that SICO has an expansionary posture in terms of our businesses, we have maintained a prudent position in our risk appetite as we monitor the regional and global economic environment.
"Although the overall economic environment was more benevolent than the previous and final quarter of last year, market volatility was still high," he said.
"As we have mentioned before, it is our view that very substantial economic challenges, with turbulence and uncertainty, will continue for the foreseeable period and therefore the bank has maintained a realistically cautious position during the first quarter of 2012," he said.
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