Bank of Sharjah Reported 7% increase in net profit for the first half of 2010
Bank of Sharjah results revealed consistent performance and continued growth during the first half of 2010. Net profit reached AED 276 million registering a 7% increase over the corresponding 2009 period figure of AED 258 million. The growth is attributed to the Bank's proven strategy, the quality of its assets, and the strength of its balance sheet.
As of June 30th, 2010 total assets reached AED 18,787 million an increase of 9% over the corresponding June 30th, 2009 figure of AED 17,199 million. The increase over the December 31st, 2009 figure of AED 18,062 million was a satisfactory 4%.
The bank's equity grew by 6 % to reach AED 4,086 million compared to the June 30th, 2009 figure of AED 3,869 million.
Bank of Sharjah has successfully managed to substantially increase its deposits portfolio. Total deposits reached AED 13,465 million as of June 30th, 2010. A significant 17% increase over the corresponding June 30th, 2009 figure of AED 11,540 million, revealing customers' confidence in our institution. Also, when compared to the December 31st, 2009 figure of AED 12,113 million, the increase in deposits was a noticeable 11%.
The Bank's loans and advances reached AED 11,969 million for the period, an increase of 8 % over the corresponding June 30th, 2009 figure of AED 11,094 million. The increase over the December 31st, 2009 figure of AED 11,450 million was a marginal 5%. This is in-line with the Bank's conservative and cautious strategy in such challenging economic environment.
Net liquidity for the period stood at AED 2,918 million, in comparison to the corresponding June 30th, 2009 figure of AED 2,724 million, liquidity has improved by 7%. The current June net liquidity figure was comparable to the December 31st, 2009 figure of AED 2,912 million, despite the payment of the USD 200 million (AED 734 million) 3 year syndicated loan which matured during June 2010.
Net interest income for the period ending June 30th, 2010 marginally dropped by 4% (around AED 13 million) to reach AED 281 million compared with AED 294 million for the corresponding 2009 period. This is the burden associated with maintaining high levels of liquidity placed in money market instruments at historically low interbank interest rates.
The revived concerns over the European debts crisis have left its impact on the worldwide and local financial markets. The U.A.E financial markets continued their downward trend during the second quarter of 2010. This lead to the current year 19% decline in total comprehensive income as a result of the AED 33 million losses on the available for sale investments portfolio versus a gain of AED 37 million in the corresponding June 2009 period.
All the above events contributed to the 7% increase in net income during the current period, which reached AED 276 million versus AED 258 million for the same corresponding period of 2009. The bank has achieved its 2010 budgeted results, notwithstanding the unwarranted massive downturn in the stock markets which impacted the actual results. Whereas our budget had initially taken into account a gain of AED 25 million from the investments portfolio for the first half of 2010.
This overall improved performance during the period was reflected in the earnings per share, which increased by 7% to reach AED 13 fils when compared with the last year corresponding figure of AED 12.2 fils.
Commenting on the results, Varouj Nerguizian, Executive Director and General Manager, stated: "The Bank's results are eloquent and I expect the year will close ahead of the budgeted figures due to major recoveries expected during the second half of 2010".
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