Net Income of Al Baraka Banking Group Jumped by 10% to US$ 212 Million and Assets by 8% to US$ 17.2 Billion by End of 2011
The Bahrain based leading Islamic banking group, Al Baraka Banking Group B.S.C. (ABG) announced that it has achieved a net income of US$ 212 million in 2011, an increase of 10% on the income achieved in 2010. Similarly, balance sheet items witnessed moderate increases. Total assets increased by 8%, total financing and investments by 4%, deposits including equity of investment account-holders by 8% at the end of December 2011 in comparison with the end of December 2010. The Group's results in year 2011 reflect the high ability of the Group to maintain its financial performance in a steady state of growth over the past few years, even during the extremely difficult conditions that prevailed over the business and banking environment during the past year as a result of the global economic crisis, and that crippled many financial institutions and the political developments in many Arab countries. This in turn also proves the soundness and robustness of the business strategies that the Group follows and which are based on unwavering commitment to the inherent values of Islamic banking.
The financial statements of the Group for 2011 showed that the continued expansion in business reflected positively on income, with total operating income of US$ 741 million in 2011, an increase of 13% over 2010. After deducting all operating expenses net operating income amounted US$ 344 million in year 2011, which represents an increase of 9% compared to the net operating income of 2010. The net income amounted to US$ 212 in 2011 compared to US$ 193 million in 2010, which reflects an increase of %10. This increase is considered a distinct result, and reflects the expansion in business, improvement of assets quality, and increase in productivity with diversification of income sources throughout the Group. The net income attributable to equity holders of the parent amounted to US$ 118 million in 2011, which reflect a 12% increase from its level in 2010.
The total assets of the Group amounted to US$ 17.2 billion as at the end of December 2011, an increase of 8% over the comparative figure as at the end of 2010. Operating assets (financing and investments) amounted to US$ 11.8 billion as at the end of December 2011 compared to US$ 11.4 billion at the end of December 2010, an increase of 4%. Customer deposits including equity of investment account-holders have witnessed a good increase of 8% from US$ 13.6 billion at the end of December 2010 to US$ 14.7 billion at the end of December 2011, which indicates continued customer confidence and loyalty in the Group and growing customer base as a result of expansion in the branch network. Total equity reached US$ 1.8 billion at the end of 2011.
As for the results of the last quarter of 2011, net income amounted to US$ 46 million, which represent an increase of 1% compared to the same period of last year. Net operating income increased to US$ 92 million in the fourth quarter of 2011 compared to US$ 90 million for the same period of last year, an increase of 3%. The net income attributable to the equity holders of the parent for the fourth quarter reached US$ 21 million.
Commenting on these results, Sheikh Saleh Abdullah Kamel, Chairman of Al Baraka Banking Group, said "The year 2011 witnessed extremely difficult political and economic conditions, where sovereign debt crisis in the United States and the Euro zone, coincided with fears of returning to economic recession, and further the international rating agencies downgrading ratings of developed countries as well as the extremely difficult political developments in a number of Arab countries including those in which we operate and their repercussions on the business and banking environment. In light of all of this, we are very proud to see continuing growth in the revenue and business of Al Baraka Banking Group and further elevation in its regional and global standing. We consider the outstanding results achieved in 2011 as an embodiment of the success of the business model that we followed since the founding of the Group, a model that reflects the true values of Islamic banking and far-sighted business strategies, supported by outstanding management expertise capable of creatively translating these values and strategies to facts on the groundâ€ť.
For his part, Mr. Abdulla Ammar Al Saudi, Vice Chairman of ABG, said that "The negative economic and financial developments continued in 2011, coincided with Arab countries political unrest, and both of them created more adverse repercussions, imposing on the financial institutions across the world to adopt conservative and cautious business strategies. In light of this, we consider the financial results achieved by the Group in 2011, amid all these developments and conditions, as excellent by all standards and they reflect the success of the business strategies that we at the Board of Directors of the Group have put in place based on our points of strength, the opportunities generated in the markets in which we operate and the highest professional values, principles and standards that we embodied in all the programs, services and products that the Group offers".
Mr. Adnan Ahmed Yousif, Member of the Board of Directors and President & Chief Executive of Al Baraka Banking Group, said "the excellent results that we achieved in 2011 were the outcome of a number of initiatives that we had launched during the past year, including continually improving the quality of our products and services, introducing more innovative products, expanding the branch network of ABG subsidiary units in 15 countries, strengthening relationships with our partners, investors and customers, and entering new markets as well as modernizing and developing our human, operational, regulatory and technical infrastructures both at Group level and subsidiary banking units levelsâ€ť.
â€śDuring 2011, we announced the acquisition of 60% of the issued shares of Al Tawfeek Financial Group through our subsidiary unit in Bahrain, Al Baraka Islamic Bank. The company's authorized capital is SAR 360 million. The name of the company was later changed to Itqan Capital to accommodate the new strategy the Group intends to implement through it. The acquisition of this Saudi company is an excellent move that reflects our Group's strategy to enter key regional markets, for Saudi Arabia, which is the largest Arab economy with strong fundamentals and a stable financial and investment environment, which presents us with significant business and investment opportunitiesâ€ť.
Mr. Adnan said "the business of our unit in Pakistan, Al Baraka Bank Pakistan is carried out in a good manner. The Bank continues implementing its expansion programs in terms of both assets and branch network, with total assets reaching US$ 796 million and network of 89 branches covering all major cities and regions in Pakistan".
With regard to the Group's plans to expand its branch network, Mr. Adnan said that "the subsidiary units of the Group in Turkey, Jordan, Algeria, Egypt and Bahrain have resumed expansion by opening new branches and this had direct positive impact on growing their deposit base and financing portfolios. We expect the number of branches of ABG banking units to exceed 500 over the next two years".
â€śDuring 2011 also, the Standard & Poors (S&P) reaffirmed ABGâ€™s investment grade long term counterparty credit rating of BBB- / A-3 (Short Term) with a Negative Outlook, according to a new rating methodology just introduced by S&P and applied to all institutions rated by itâ€ť.
â€śWe also continued during the past year strengthening of the regulations, applications and practices of corporate governance, risk management and social responsibility of the Group and its subsidiary units, which had a clear impact on the improvement of the Group performance, and improvement of the quality of their products and enhancement of their service to the communities in which they operateâ€ť.
Mr. Adnan added "the work is continuing, according to the planned timetable, on the construction of the Group Headquarter located in Bahrain Bay by the Arabtec Construction Company which is one of the largest contracting companies in the Arab world. The US$ 100 mm new Headquarter of the Group is designed to meet the present and future needs of the Group. The choice of the Bahrain Bay for the construction of its headquarters stems from the belief of the vital importance enjoyed by the Kingdom of Bahrain as a financial and Islamic banking center both regionally and globally. Therefore, the site will support the requirements for success of Al Baraka Banking Group, regionally and globally and, it is consistent with our future goals and aspirationsâ€ť.
â€śThe Group continued over the past year to win a number of regional and international awards including "Best Website" for 2011 among the largest companies listed on the Bahrain Stock Exchange for the second year in a rowâ€ť.
Mr. Adnan said "we would like to stress here that all our banking units, including those which their countries are witnessing stage of political transformation in the present time, have improved their performance and achieved growth in profits, as the strategies of our work in these countries are based on long-term commitment to contribute in their development and evolutionâ€ť.
Mr. Adnan added that "In accordance with our new strategy, we have many plans and initiatives that we intend to implement during 2012. 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".
â€śWe intend during the year 2012 to open our representative office in Libya and this stems from belief of the importance of Group existence in this very important market, as the delay of opening of the office was due to political developments witnessed by Libya last yearâ€ť.
â€śWe intend also to study expanding in parts of Africa and Asia such as Indonesia, China and India in the context of our medium-term strategy to enter into large and promising markets where we can offer our unique and innovative services and products on the broad sector of clients and investorsâ€ť.
Mr. Adnan concluded his statement by praising the tireless efforts of the executive management at Group Head Office, the executive management teams of the banking units of Al Baraka Banking Group and related parties that played an instrumental role in achieving these excellent results for the Group.
On this occasion, Sheikh Saleh Abdulla Kamel, Chairman of Al Baraka Banking Group, Mr. Abdulla Ammar Al Saudi, Vice Chairman, Mr. Abdulla Saleh Kamel, Vice Chairman, and Mr. Adnan Ahmed Yousif, Member of the Board and President & Chief Executive of ABG and all Members of the Board of Directors of ABG expressed their sincere thanks to the Ministry of Industry and Commerce, Central Bank of Bahrain, Bahrain Bourse 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 continued support. They also thanked all the employees of the Group for their loyalty, hard work and dedication which stand behind the successes and achievements of the Group.
Al Baraka Banking Group (Al Baraka) is a Bahrain Joint Stock Company listed on Bahrain Bours and Nasdaq Dubai stock exchanges. It is a leading international Islamic bank with Standard and Poors investment grade long term counterparty credit rating of BBB- / A-3 (Short Term). Al Baraka offers retail, corporate, treasury and investment banking services, strictly in accordance with the principles of the Islamic Shari'a. The authorized capital of Al Baraka is US$1.5 billion, while total equity amounts to about US$1.8 billion.
The Group has a wide geographical presence in the form of subsidiary banking Units and representative offices in fifteen countries, which in turn provide their services through more than 400 branches. Al Baraka is currently having a strong presence in Jordan, Tunisia, Sudan, Turkey, Bahrain, Egypt, Algeria, Pakistan, South Africa, Lebanon, Syria, Indonesia, Libya (under formation), Iraq and Saudi Arabia.
Main Performance Indicators During 2011:
December 2011 compared with December 2010 Growth
Total operating income 13%
Net operating income 9%
Net income 10%
Net income attributable to equity holders of the parent 12%
Total assets 8%
Total financing & investments 4%
Total customer deposits 8%
Al Baraka Banking Group Financial ADV