Big jump in profit for Banque Albaraka D’algerie as net profit soars by 106% in 2008
Banque Albaraka D’Algerie, a subsidiary banking unit of Albaraka Banking Group B.S.C. (ABG), announced that it succeeded in achieving a big jump in its net profits and operating assets during 2008. Net profits increased by 106%, net operating income by 70%, assets by 21%, financing by 28% and equity by 42%. It also announced that it was planning to open 50 more branches during the next five years.
The financial statements announced by the Banque Albaraka D’Algerie revealed that the Bank had achieved unprecedented record results which surpassed the results achieved the previous year. Total operating income increased by 63% from US$51.12 million in 2007 to US$81.09 million in 2008 in line with a noticeable growth in financing and fee income. After deducting operating expenses, net operating income increased to US$59.82 million in 2008 compared to US$35.21 million in 2007, reflecting an increase of 70%. After setting aside provisions and taxation allocations, net income increased to US$38.94 million, reflecting a substantial increase of 106% compared to 2007.
This increase enabled the Bank to improve the return on shareholders equity and return on assets which increased from 24% and 2.5% in 2007 to 35% and 4.2% respectively in 2008.
These excellent results came on the back of marked growth in the financing activities of the Bank in 2008. Total financing increased by 28% to reach US$706.70 million in 2008, which helped to contribute to a 21% increase in total assets to reach US$1.02 billion as at the end of 2008. The increase in assets was financed by an increase of 16% in customers' deposit accounts and unrestricted investment accounts to reach US$780.22. The growth in these accounts which financed 76.4% of total assets reflects the strong customer base of the Bank. On the other hand, total assets increased by 42% to reach US$128.47 million as at the end of 2008.
Commenting on these results, Mr. Adnan Ahmed Yousif, Chairman of the Board of Directors of Banque Albaraka D’Algerie and President & Chief Executive of Albaraka Banking Group, said that the excellent performance of the Bank in 2008 was another proof that the Bank was well positioned in the Algerian market and that it took full advantage of the opportunities available in this rapidly growing market by making the best use of the strong support that the parent company, Albaraka Banking Group, extended to it, which together with the concerted efforts of the executive management and the employees of the Bank, helped in achieving such excellent results.
Mr. Adnan Ahmed Yousif added that the Board of Directors of the Bank had approved a big expansion plan for the coming years. Work on the new head office of the Bank is expected to commence in 2009. The Bank is in the process of selecting and implementing a new IT system. The Bank also has plans to install an ATM network comprising 50 machines and it intends to open 6 new branches in 2009 as part of the overall target to add 30 new branches to make a total of 50 branches in 5 years. The Bank will also introduce a number of new products including home furnishing consumer loans and a variety of deposit schemes, such as youth and property savings accounts and Hajj and Umrah savings deposits.
On his Part, Mr. Mohammed Seddik Hafid, Board Member and General Manager of the Bank, said that the Bank, thanks to the financial and technical resources available to it, was able to capitalise upon the strong performance of the Algerian economy which is estimated to have witnessed growth of 3.0% in 2008. Per capita income also witnessed a significant increase of 20% to reach US$4,800. On the other hand, the rate of inflation dropped slightly from 4.4% in 2007 to 4.1%, which enabled the Central Bank to maintain the interest rate unchanged at 4%. Export revenues once again set new records, reaching an estimated $80 billion, of which non-hydrocarbon related exports contributed more than US$2 billion for the first time. Foreign exchange reserves for the year reached US$146 billion, equivalent to 4 years’ import cover. The Algerian government continued to pursue its policies of economic reform, aimed at boosting economic activity and bringing down the level of unemployment through investment in the country’s infrastructure, particularly in road and railway construction, and utilities development.
Banque Albaraka D’Algerie is one of the Banking Units of Albaraka Banking Group. Albaraka Banking Group (ABG) is a Bahrain Joint Stock Company listed on Bahrain Stock Exchange and Nasdaq Dubai Stock exchange. It is a leading international Islamic bank with Standard and Poors long and short term credit ratings of A-3 and BBB- respectively. ABG offers retail, corporate and investment banking and treasury services strictly in accordance with the principles of the Shari'a. The authorized capital of ABG is US$1.5 billion, while the total equity amounts to about US$1.55 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 283 branches. These banking Units are Jordan Islamic Bank/Jordan, AlBaraka Islamic Bank/Bahrain, AlBaraka Islamic Bank/Pakistan, Banque AlBaraka D'Algerie/Algeria, AlBaraka Bank Sudan/Sudan, AlBaraka Bank/South Africa, AlBaraka Bank Lebanon/Lebanon, Bank Et-Tamweel Al- Tunisi Al Saudi/Tunisia, The Egyptian Saudi Finance Bank/Egypt, AlBaraka Turk Participation Bank/Turkey, AlBaraka Bank Syria (under formation), and an ABG representative office in Indonesia.