Al Baraka Islamic Bank Total Operating Income Soars by 51% in 2011
Al Baraka Islamic Bank BSC (c), a subsidiary banking unit of Al Baraka Banking Group, announced that it continued to achieve good results in 2011. The financial statements of the Bank for 2011 show that total operating income increased by 51% in 2011. In addition, total assets went up by 18.7%, and investment and financing portfolio by 13.5% at the end of December 2011 compared to the end of December 2010. These results confirm the solidity of the Bank‚Äôs business strategy, and growth in his activities in all fields, especially in the main two markets of its businesses in Bahrain and Pakistan.
The financial statements of the Bank for the year 2011 show that the net income reached BD 978 thousands in 2011 compared to BD 1.75 million in 2010. This drop was a result of the 61% increase in operating expenses due to fully consolidation of operations of the Bank in Pakistan and Bahrain for the first time in 2011. Due to same reason, the net operating income decreased by 6.3% to reach BD 1.46 million 2011. Total operating income, however, improved by 51% in 2011 to reach BD 16.2 million compared to BD 10.7 million in 2010, reflecting the quality of the Bank businesses and soundness of its resources. Moreover, the improvement in total operating income is due to the increase of the Bank‚Äôs business in Bahrain and Pakistan, improvement in the quality of income-generating assets and a reduction in non-performing financing as well as an increase in income from foreign trade financing and from arranging financing deals.
The financial statements for the 2011 also show that total assets increased by 18.7% to BD 602.4 million as at the end of December 2011 in comparison with December 2010, as a result of growth in the Bank‚Äôs business in Bahrain and Pakistan, which in turn was reflected positively on all key items of the balance sheet. Finance and investments portfolio increased by 19.5% to BD 470.9 million as at the end of December 2011 compared to December 2010, as a result of arranging new finance transactions and increased financing of foreign trade and consumer finance. This increase was financed by the growth in deposits and investment accounts by 13.5% to BD 484.2 million at the end of December 2011. Total shareholders' equity amounted to BD 67.42 million as at the end of December 2011.
As for the results of the fourth quarter of 2011, net loss amounted to BD 379 thousand compared to a profit of BD 1.4 million for the same period in 2010. This drop was due to fully consolidation of operations of the Bank in Pakistan and Bahrain, while net operating income went up by 111% to BD 395 thousands and total operating income rose by 66% to BD 4.1 million during the fourth quarter of 2011 compared to the same period in 2010.
Commenting on these results, Chairman of the Board of Directors of Al Baraka Islamic Bank Mr. Khalid Rashid Al Zayani said "The year 2011 was tough year locally, regionally and globally and was characterized by aggravation of economic problems internationally, especially in the Euro zone and US, which in turn created unfavorable environment for businesses and banks in the world. Despite this, we are delighted to see the good performance of Al Baraka Islamic Bank. These results were achieved firstly by the Grace of Allah, and then by the outstanding efforts made by the Bank management in expanding the Bank‚Äôs activities and business at all levels based on the flexible and diverse business strategies that it had launched last year and which included a number of initiatives in the area of product diversification, expansion of branch network, enhancement of foreign trade financing and other initiatives that have had good impact on the results of the Bank."
For his part, Mr. Adnan Ahmed Yousif, Vice Chairman of Al Baraka Islamic Bank and President & Chief Executive of Al Baraka Banking Group, said that " 2011 year was certainly challenging year for all of us given the negative political and economic development is witnessed at both regional in global levels. The Bank faced all these challenges by implementation of a series of initiatives that had clear positive effects on the Bank's performance during 2011. The conversion of the Bank's branches in Pakistan to an independent Islamic commercial bank following the merger with Emirates Global Islamic Bank in Pakistan and our hard work to turnaround these branches to profitability had an evident positive effect on the operations of the Bank. We also continued our ambitious work in Bahrain to launch new services and products, open new branches, and enhance capital, technical and human resources of the Bank. All these factors had helped in achieving the good results of the Bank during 2011."
Mr. Mohammed Isa Al Mutaweh, member of the Board of Directors and Chief Executive Officer of Al Baraka Islamic Bank, said " We focused in 2011 on our marketing efforts either through building fruitful business relations with major industrial and commercial companies in Bahrain with a view to providing them with products and services that meet their banking and finance needs, as well as enhancing our relations with government and quasi- government institutions and with banks and financial institutions or through expanding our branch and ATM networks both in Bahrain and Pakistan or through launching attractive promotional offers and new developed products‚ÄĚ.
During 2011, we have continued our efforts in expanding our business operations in Bahrain and Pakistan. In Pakistan our focus was in particular on strengthening the operations of the Bank's branches to turn them around to profitability, which made the Bank the second-largest Islamic bank in Pakistan.
Based on all these steps, we succeeded in arranging a number of major finance transactions in which banks inside and outside the region had participated. In this regard, the Bank has succeeded in signing memoranda of understanding with three Indian banks to finance Indian exports to African countries, in implementation of its ambitious plan to finance trade between India and African countries. The Bank is also working on arranging an Islamic financing deal of about US$ 40 million to finance the import of sugar to some Arab countries from a sugar- exporting country, and there are many more deals that will be arranged in the first quarter of 2012.
As for our local branch network, we have in June 2011 celebrated the opening of the Bank‚Äôs sixth branch in the Kingdom of Bahrain in Al Ramly Mall, Aali. Furthermore, we also started working on a plan to open two more branches this year 2012, which highlights our determination to enhance our financing and deposit market share, considering that the Bank has a range of highly successful financial and deposit products designed for individuals and companies which include many attractive features that best meet the needs of customers in strict compliance with Islamic Sharia."
Mr. Al Mutaweh added that ‚ÄúAs for the ATM network, work is in progress to add five more ATM machines during the current year 2012, to bring the total number of ATMs to 16. The focus will be on installing stand- alone ATMs that are not part of branches of the Bank, with particular emphasis on drive-by ATMs. We also started working on implementing the Bank's plan to launch e-banking services which include providing Internet banking and phone banking services. These services are expected to be available to customers by the end of this year‚ÄĚ.
AS for the internal work environment, we turned much of our attention to the development of the Bank's human resources and the hiring of skilled recruits to help the Bank in the implementation of its new business strategies. Furthermore, we introduced new IT systems to enable the Bank provide the most advanced banking services to its customers and increase its operational efficiency, in addition to enhancing and updating regulations relating to risk management, governance, anti-money laundering and compliance.
We are delighted also by the reaffirmation of the credit ratings of the Bank by Capital Intelligence, in early August 2011 as it maintained its BB + rating for long-term foreign currency obligations and A3 for short-term foreign currency obligations with a stable outlook. According to the Agency, this rating reflects the good quality of the Bank‚Äôs assets, its strong capital base, adequate liquidity and high capital adequacy ratio as well as the strong support that the parent company, Al Baraka Banking Group, affords to the Bank.
Concluding their statements, Mr. Khalid Rashid Al Zayani, Chairman of the Board of Directors of the Bank, Mr. Adnan Ahmed Yousif, Vice Chairman of the Board and Mr. Mohammed Isa Al Mutaweh, Chief Executive Officer of the Bank expressed their sincere thanks to the Ministry of Industry and Commerce and the Central Bank of Bahrain for the cooperation and assistance they extended to the Bank. They also expressed their thanks to all of the investors, customers and employees for their continuing support and loyalty.
Al Baraka Islamic Bank is one the subsidiary banking units of Al Baraka Banking GroupAl 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.