Al Baraka Banking Group Continues to Achieve Successes with a Growth of 3% in Net Income and 3% in Total Assets
Al Baraka Banking Group Continues to Achieve Successes with a Growth of 3% in Net Income and 3% in Total Assets
The Bahrain based leading Islamic banking group, Al Baraka Banking Group B.S.C. (ABG) announced that it had continued to achieve its targets for year 2010. The balance sheet items witnessed moderate growth during the first half of year 2010 as total assets grew by 3%, finance and investments by 2% and deposits and unrestricted investment accounts by 4%, while Group net income increased by 3% to reach US$ 95 million and total operating income by 2% to reach US$ 307 million in the first six months of 2010. The results reflect the soundness of the financial and marketing resources of the Group as well as its success in capitalizing upon investment opportunities offered by the current financial and economic circumstances. They also reflect the Group's ability to further strengthen its technical and capital capabilities and expand its branch network in accordance with the set plans.
The growth in the operating assets of the Group enabled it to achieve good profit results during the first half of the year 2010. Total operating income amounted to US$ 307 million in the first half of 2010 compared with US$ 302 million for the first half of 2009, which reflects an increase of 2%. After deducting all operating expenses, which increased as a result of the Group's continued spending on expanding its network of branches and upgrading the IT infrastructure of the Group and the units as well as expenses associated with the launch of the new identity of the Group and building up precautionary provisions of affiliate units, the net income of the Group amounted to US$ 95 million in the first half of 2010, an increase of 3% over the net income of US$ 92 million for the first half of year 2009. The net income attributable to the shareholders' equity of the parent company for the first half of 2010 increased by 10% to reach US$ 54 million compared with US$ 49 million for same period last year.
As with regard to the quarterly financial results for the second quarter of this year 2010, the Group's total operating income amounted to US$ 150 million during the second quarter of 2010 compared with US$ 163 million for the second quarter of 2009, while Group net income amounted to US$ 47 million in the second quarter of 2010 compared with US$ 49 million for the second quarter of 2009. The net income attributable to the shareholders' equity of the parent company for the second quarter of this year amounted to US$ 27 million compared with US$ 25 million for the same period last year, an increase of 5%.
The total assets of the Group amounted to US$ 13.6 billion as at the end of June 2010, compared with US$ 13.2 billion as at the end of December 2009, representing a growth of 3%. This increase has been reflected in the growth of operating assets (financing and investments) which increased by 2% to reach US$ 9.6 billion in total as at the end of June 2010. Customer deposit and other accounts and unrestricted investment accounts witnessed a consistent growth and increased by 4% from US$ 11 billion as at the end of December 2009 to US$ 11.4 billion as at the end of June 2010, which reflects continued trust and loyalty of customers in the Group. Total equity amounted to US$ 1.7 billion as at the end of June 2010.
Commenting on these results, Sheikh Saleh Abdullah Kamel, Chairman of Albaraka Banking Group, said "Once again, the results of Al Baraka Banking Group for the first half of 2010 confirmed the soundness of the business strategies that the Group follows that strike a balance between prudence and the precautionary approach necessitated by the current regional and global economic and financial conditions on one hand, and the need to continue expanding in the markets and provide innovative Islamic services and products to its customers on the other. We are also pleased to reaffirm our unwavering commitment to the Group's compliance to the Sharia principles and its moral obligations toward the development of the communities in which it operates, and at the same time maximize the Group's shareholders and owners' value."
Sheikh Saleh Abdullah Kamel added that "I am also pleased on this occasion to express our pride in the initiatives of the executive management of the Group in the area of coordinating the plans and programs of the subsidiary units to ensure that all units work within the framework of common strategies. The first half of 2010 witnessed many of such important initiatives that had proven their effectiveness in the current challenging situation. Furthermore, there is no doubt that the efforts of the executive management at ABG Head Office and the executive management teams at the subsidiary units of the Group played a pivotal role in achieving these results, backed by the long experience they have in the markets in which the units operate, the substantial capital resources at the disposal of the units and the large branch network of the Group".
For his part, Mr. Abdulla Ammar Al Saudi, Deputy Chairman of ABG said that "the financial results achieved in the second quarter of 2010, and the first half of the year as a whole, emphasize both in terms of operating and revenue indicators our success in dealing with the current difficult banking and financial situation, and at the same time continue to achieve our goals set for the year, while on the other hand continue implement our investment spending programs to expand the Group's branch network, upgrade the IT infrastructure and strengthen our human resources, and thirdly take the necessary preventive measures in response to developments by enhancing our liquid assets and reserves. By grace of Allah, we were able to successfully implement these strategies, and we are now at the forefront of major Islamic banking institutions that maintain consistent and sustainable growth and profitability".
Mr. Adnan Ahmed Yousif, President & Chief Executive of ABG said â€śthat the first half of the year 2010 saw the implementation of several important strategic initiatives that emphasized our determination to continue implement our set goals. One of these major initiatives was the launch of the operations of our bank in Syria, Al Baraka Bank Syria. In this regard, we intend during the next phase to start opening branches in all major cities in Syria through which the Bank will provide different Islamic commercial banking services. We are also proud that Bank's IPO was received with such a huge response that exceeded all expectations as it was oversubscribed by more than 4 times. The capital of Al Baraka Bank Syria is Syrian pounds 5 billion (US$ 100 million)â€ť.
Mr. Adnan Ahmed Yousif added that "The first half of the year also saw the completion of the launch of ABG new identity, the last of which was completed in Sudan, Egypt and Jordan, and as a result all the banks of the Group now carry the ABG logo and identity. The new identity, in line with the philosophy on which it is based, 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".
â€śWe also with the grace of Allah obtained all the regulatory approvals for merging the branches of Al Baraka Islamic Bank in Pakistan with Emirates Global Islamic Bank - Pakistan under the name of Al Baraka Bank of Pakistan. The merger will lead to the emergence of a bank that has assets in excess of US$ 582 million and a network of 89 branches covering all major cities and regions in Pakistan. This step comes as part of the Group's strategy 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 one of the most important markets in the Muslim world".
Mr. Adnan Yousif added "that the Pakistani market had great potential and tremendous opportunities for growth and expansion considering the size of the population of more than 175 million Muslims, wide-ranging economic and financial reforms designed to encourage investors to continue with and expand their investments and consolidate their presence in the highly competitive Pakistani market. The merger will also strengthen and increase our market share and at the same time help meet regulatory requirements with respect to strengthening the Bank's capital and enhance its technical and human resources".
â€śFurthermore, we in the first half of 2010 submitted an application for opening a representative office in Libya. We believe that it is quite essential for ABG to have a presence is in this very important market, especially after the steps taken by the Central Bank of Libya to promote Islamic banking operations there. Meanwhile, our banking units in Turkey, Jordan, Egypt, Algeria, Lebanon and Bahrain continued the opening of new branches and this had direct positive effect on the growth in their deposit base and financing portfolios. We expect the number of branches of ABG banking units to exceed 450 branches over the next three years, compared with about 300 branches at presentâ€ť.
â€śIn addition to enhancing our relations with our partners, investors and customers we have focused over the past period on modernizing and developing the human, operational, regulatory and technical infrastructures at the Group and subsidiary banking units' levels. We are pleased that a number of banking unit had received many international awards as a result of their excellence and achievementsâ€ť.
In concluding his statement, the President & Chief Executive of ABG praised the great efforts exerted by the executive management at Head Office and the executive management teams at the subsidiary banking units of the Group and other concerned parties that led to achieving such excellent results by the Group.
For their parts, Sheikh Saleh Abdullah 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.
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 & Poorâ€™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 thirteen countries, which in turn provide their services through more than 300 branches. These banking Units are Jordan Islamic Bank, Al Baraka Islamic Bank â€“ Bahrain, Al Baraka Islamic Bank â€“ 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 - Turkey, Al Baraka Bank Syria and Group representative offices in Indonesia and Libya (under formation).
Growth in total operating income 2%
Growth in net income 3%
Growth in income attributable to Parent Company shareholders 10%
Growth in total assets 3%
Growth in total financing and investments 2%
Growth in total deposits and unrestricted investment accounts 4%
Note: Profitability rates of growth are for the first half of 2010 compared with the first half of 2009, while growth rates of balance sheet items are for June 2010 compared with December 2009.
Item (compared with the end of June 2009) Growth
Growth in total assets 18%
Growth in total financing and investments 13%
Growth in total deposits and unrestricted investment accounts 21%