Shamil registers $1 million profit

01/03/2010 00:00 AST

Shamil Bank yesterday reported a net profit of $973,000 for last year, compared to a net profit of $22 million for 2008.

In the fourth quarter of last year, it made a net loss of $4.4m following non-cash provisions of $19.4m. Net losses reported for the fourth quarter of 2008 were $16.2m.

The announcement by Shamil Bank chairman Shaikh Mohamed Abdulla Al Anqari follows the review and approval, by the board of the directors of the bank's consolidated financial results for last year.

Shaikh Mohamed, who said he was pleased with Shamil Bank's performance last year, attributed the decrease in the bank's profitability to prudent provisions to cover credit facilities and impaired investments.

"The fact that Shamil Bank reported almost $1m in net profits for 2009 is significant, particularly considering the increasingly challenging market conditions," said Shaikh Mohamed.

"The achievement is made all the more impressive by the dramatic three-fold increase in provisions that were prudently taken in 2009," he said.

Shamil Bank's 2009 financial results include provision of $42.4m, up from S$14min 2008, an increase of $28.4m.

Shaikh Mohamed added that, despite the challenging market conditions and economic volatility, net income before provisions for last year remained at $26.1m, same as 2008.

This was primarily because of significant fee income earned. Other income earned last year was a remarkable $29m.

Chief executive Faisal Al Alwan said: "Although the net profit is lower in 2009 than in 2008, the core banking income, from retail, corporate, treasury and international banking activities, has grown substantially in 2009."

"In 2009, Shamil Bank continued to expand its branch and ATM network while improving its products and services," said Mr Al Alwan.

"The bank's electronic banking platform, for example, was substantially improved, the number of branches increased, from nine in 2008 to 11 in 2009, and the number of ATMs increased to 24. In 2009, Shamil Bank also introduced new, internationally recognised, chip-enabled credit and ATM cards to offer customers increased security," he said.

"Consequently, Shamil Bank's retail banking operations saw significant growth with assets increasing in 2009 by 17 per cent to $342m," said Mr Al Alwan.

"This growth, a result of is reflection of our customers' confidence," he said.

"Murabaha financing has also increased by 11.5pc, from $1.05 billion in 2008, to $1.17bn in 2009," said Mr Al Alwan.

"The bank's liquidity has also remained high, with almost 29pc of the bank's assets in money market placements. Importantly, customer funds in unrestricted investment accounts increased by an outstanding 42pc to $973m, from $683m at 2008. This is a further affirmation of customer confidence in Shamil Bank at a time of very difficult market conditions," he said.

Gulf Daily News