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   2010
   
 

ABG Net Profit Soars by 13% to US$ 48.3 Million in First Quarter of 2010

 The Bahrain based leading Islamic banking group, Al Baraka Banking Group B.S.C (ABG) announced that it had posted a net profit of US$ 48.3 million in the first quarter of 2010, an increase of 13% over the profit of the first quarter of 2009. Balance sheet items also witnessed significant growth as total assets increased by 4%, liquid assets by 6%, total finance and investments by 3% and deposits by 4% as at the end of March 2010 compared with the end of December 2009.  These growth rates not only reflect the successful strategies being implemented by the Group to tackle the repercussions of the global crisis, but also the substantial financial resources that enabled it to further capitalize upon the opportunities generated by the current situation while continuing to strengthen its technical and financial capabilities and expand its geographical presence and branch network in accordance with the set plans.

The financial statements of the Group for the first quarter 2010 show that the continued expansion in business was reflected positively in the income, as total operating profit amounted to US$ 157 million in the first quarter of 2010, an increase of 13% compared to the first quarter of 2009. After deducting all operating expenses, net operating income in the first quarter of 2010 amounted to US$ 77.7 million, an increase of 10% over the net operating income of the first quarter of 2009. Net profit amounted to US$ 48.3 in the first quarter of 2010 compared to US$ 43 million in the first quarter of 2009, reflecting a good increase of 13%. This increase was achieved in spite of a 15% increase in operating expenses in the first quarter of 2010, compared to the first quarter of 2009, on account of further expansion of the branch network, strengthening of the human resources and technical infrastructure. In addition, the general and specific provisions have been enhanced at the Group and subsidiary units levels.

The total assets of the Group amounted to US$ 13.72 billion as at the end of March 2010, an increase of 4% compared to its level as at the end of 2009, and operating assets (finance and investments) US$ 9.67 billion by the end of March 2010 compared to US$ 9.43 billion as at the end of December 2009, an increase of 3%, while liquid assets increased by 6% to reach US$ 3.72 billion by the end of March 2010. Customer deposits and other accounts and unrestricted investment accounts witnessed an increase of 4% from US$ 11 billion at the end of December 2009 to US$ 11.45 billion as at the end of March 2010, indicating continued customer confidence and loyalty to the Group.

The Ordinary General Meeting of ABG on 24th March 2010 approved to pay cash dividends to shareholders at the rate of 6% of the share capital, amounting to a total of US$ 44.64 million and the issue of bonus shares at the rate of one share for every 16 paid shares (amounting to US$ 46.5 million).

Commenting on these results, HE Sheikh Saleh Abdullah Kamel, Chairman of Al Baraka Banking Group said "We note with satisfaction the ability of Al Baraka Banking Group to continue achieve outstanding results under extremely difficult economic and financial conditions. This reflects the success of the Group in pursuing prudent strategies that enabled it to deal successfully with these conditions and continue expanding its business and at the same time continue implementing its programs for geographic expansion, building up branch network and enhancing its human and technical capabilities.   These achievements, in turn, prove the success of the Islamic banking model of ABG which requires it to work on the construction of the land and serving the communities amongst which it operates, while being committed to the highest ethical and professional standards".

For his part, Mr. Abdulla Ammar Al Saudi, Deputy Chairman of ABG said that "The financial and operating results that we have achieved during the first quarter of 2010 reflect our "excellence in achievement" which is the new slogan that ABG embraces and intends to continue implement consistently and firmly based on the values and principles in which the Group believes and which, in turn,  are reflected in the Group's new identity launched last year. By embracing these values and principles, ABG was successful in implementing the strategies and programs that were set by the Board of Directors of the Group taking into account the regional and global banking market conditions which were adversely impacted by the global economic crisis."

Mr. Adnan Ahmed Yousif, President & Chief Executive of Al Baraka Banking Group said "The outstanding results that we achieved during the first quarter of 2010 highlight once more our determination to continue to invest our substantial financial resources and expertise and the wide geographic network of the subsidiary units of the Group in maximising the returns to our shareholders and the investors in the Group by implementing short and medium term business strategies based on improving the quality of our products and services, offering more innovative products, expanding the branch network of the Group subsidiary units, which is around 300 branches in twelve countries, strengthening the relationship with our partners, investors and customers and entering new markets, as well as modernizing and developing the human, operational, regulatory and technical infrastructures at the Group and subsidiary banking units levels".

With regard to the Group's plans to expand its branch network, the President & Chief Executive said that "the subsidiary units of the Group had resumed expansion by opening new branches in the first quarter of the year. Six new branches have been opened so far and we intend to open more branches in Egypt, Algeria, Sudan and Turkey in 2010".
 
As for the geographic expansion and entry into new markets, Mr. Adnan Ahmed Yousif said that "the first quarter of the year saw the formation of the Board of Directors of Al Baraka Bank Syria and the finalisation of setting up the business and support departments in preparation for commencing operations in the local market shortly. The Bank, which was established with a capital of US$ 100 million, will offer all types of Islamic banking products and services to its individual and corporate customers through a network of branches covering all major cities in Syria".

It was also announced recently that Al Baraka Islamic Bank (Bahrain), a subsidiary banking unit of Al Baraka Banking Group, and Emirates Global Islamic Bank were planning a merger between the branches of Al Baraka Islamic Bank in Pakistan and Emirates Global Islamic Bank - Pakistan under the name of Al Baraka Bank Pakistan. The merger will lead to the emergence of a bank that has assets with an approximate amount of US$ 582 million and a network of 89 branches covering major cities and towns in Pakistan.  Obtaining the necessary approvals from the regulatory authorities and official bodies in the Kingdom of Bahrain and the Republic of Pakistan is under way. The merger between the two banks reflects the Group's strategy to expand in the Pakistani market as part of its strategies to strengthen its presence and operations in promising Islamic markets. The merger will create a high value-addition not just for the merged financial institutions, but also for the banking and financial market in Pakistan which is considered to be one of the most important markets in the Muslim world".

Mr. Adnan Ahmed Yousif said that "During the first quarter of this year, we completed the launch of the new corporate identity in ceremonies celebrating this occasion in all the subsidiary banking units of the Group, except Jordan Islamic Bank which will be the last unit to launch the new identity, God willing, on 30th June 2010. The new identity requires us to adopt a set of policies and high ethical and professional standards with regard to the offering of innovative and efficient Sharia-compliant services and products.    To achieve this, we put in place a number of programs and plans which are currently being implemented to embody the theme of the new identity of the Group in being partner bank to our customers, investors, and all our stakeholders".
 
We have also almost completed the installation and commissioning of the new IT system which links the Group with all the subsidiary units and integrates all their databases into one. This will help the Group and its subordinate units improve the quality and speed of the services provided to customers, increase employees productivity and link their operations to one IT network, which will also contribute to increasing the volume of transactions between the units of the Group and exchange of information on all activities, services and products offered to by the units.

The President & Chief Executive of the Group added that "In accordance with our new strategic plan, we have many plans and initiatives that we intend to implement during 2010.  These will include launching new innovative products and services in the markets as well as enhancing the standing of ABG in the international markets.  All of these plans will be implemented, God willing, successfully considering that we are the only Islamic banking group that has such diversity of geographical presence and excellent knowledge of the markets".

In implementation of the resolution of the Extraordinary General Meeting of Al Baraka Banking Group held on 24th March 2010 that approved increasing the maximum number of board members from 11 to 15, two new members were elected to the Board of Directors to complete the remaining period of the term of the incumbent Board of Directors. The two new board members are Dr. Basim Awadallah and Mr. Mohyiddin Saleh Kamel.

In concluding his statement, the President  & Chief Executive of ABG praised the great efforts exerted by the executive management at the Head Office and the executive management teams at the subsidiary banking units of the Group and other concerned parties that led to achieving the results planned and budgeted by the Group.

For their parts, HE Sheikh Saleh Kamel, Chairman of Al Baraka Banking Group, Mr. Abdulla Ammar Al Saudi, Deputy Chairman, Mr. Adnan Ahmed Yousif, President & Chief Executive of the Group and all members of the Board of Directors expressed their sincere thanks to the Ministry of Industry and Commerce, Central Bank of Bahrain, Bahrain Stock Exchange and Nasdaq Dubai for the cooperation and assistance they extended to the Group since it was established. They also extended their thanks to all the central banks in the countries in which Group banks operate and to all investors and customers for their continuing support and custom. They also thanked all the employees for their hard work, dedication and loyalty.


Performance indicators for the First Quarter 2010

Income

 (March 2010 compared to March 2009)

Growth

Growth in total operating Income

13%

Growth in net operating income

10%

Growth in net income

13%

Balance Sheet Items

 (March 2010 compared to December 2009)

 

Growth in total assets

4%

Growth in liquid assets

6%

Growth in financing and investments

3%

Growth in deposits accounts

4%


Al Baraka Banking Group is a Bahrain Joint Stock Company listed on Bahrain and NASDAQ Dubai stock exchanges. It is a leading international Islamic bank with Standard & Poor’s long and short-term credit ratings of BBB- and A-3 respectively. Al Baraka Banking Group offers retail, corporate / investment banking and treasury services strictly in accordance with the principles of the Islamic Shari'a. The authorised capital of Al Baraka Banking Group is US$1.5 billion, while total equity amounts to about US$1.7 billion.

The Group has a wide geographical presence in the form of subsidiary banking Units and representative offices in twelve countries, which in turn provide their services through more than 300 branches. These banking Units are Jordan Islamic Bank, Al Baraka Islamic Bank – Bahrain, Al Baraka Islamic Bank – Pakistan, Banque Al Baraka D'Algerie, Al Baraka Bank Sudan, Al Baraka Bank Limited - South Africa, Al Baraka Bank Lebanon, Al Baraka Bank Tunisia,  Al Baraka Bank Egypt, Al Baraka Turk Participation Bank, Al Baraka Bank Syria and a Group representative office in Indonesia.

For further information, please contact:

Corporate Communications Department
Al Baraka Banking Group B.S.C.
Tel:  +97317541122 (Ext: 227)
Fax: +97317536533
Website: www.albaraka.com
Email: info@albaraka.com
         maljowesir@albaraka.com 

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