This week saw the launch of a promising opportunity for shareholders to increase their stake in one of Bahrain’s dynamic commercial and retail banks. Subsequent to obtaining the necessary approvals, the board of Bahraini Saudi Bank (BSB) invited all current bank shareholders to subscribe for their rights shares on offer from March 15.
The shares will be issued at BD 0.120 per share and the rights issue will result in an increase in BSB’s issued capital of BD20 million to BD50 million. All those registered as shareholders on March 10, 2005 – the ‘record date’ - will be entitled to subscribe to the shares, offered on the basis of 1 share for every 1 share held.
In accordance with Bahrain Stock Exchange regulations, trading in BSB’s shares stopped on March 13 and will remain un-traded for the duration of the rights offer period. The closing date for subscriptions is March 29, with share allocations determined and new share certificates due for distribution by April 10, when trading in BSB shares will resume.
Subscription forms are available from the Securities and Investment Company BSC (c) from BSB’s main branch or from the share registrar, KPMG.
According to Shaikh Fahad Mohammed AI Athel, Chairman of Bahraini Saudi Bank, the capital increase will be used to facilitate the bank’s continued growth and development. “This move to increase our capital is part of an ongoing planned programme to grow, diversify and enhance our offer to customers in Bahrain. We are in a constant process of review and readjustment of our strategic plans and objectives and intend shortly to launch the next phase of our growth plans. The support of our shareholders in increasing our capital at this stage will be a large driver in achieving our long term goals and opportunities,” he said.
The performance of the bank in 2004 is commendable and a direct result of earlier restructuring and prudent management practices. A net profit of BD 1.88 million was achieved in 2004 - a growth of 25.4% over the BD 1.5 million in 2003. Operating expenses were also reduced, substantially improving the Bank’s cost to income ratio, which stood at 58.2% in 2004 compared to 66.0% in 2003.
The capital adequacy ratio – a measurement of total qualifying capital held in relation to risk weighted assets – was 44.9%. This is well above the minimum requirement of 12% prescribed by the Bahrain Monetary Agency for Banks operating in Bahrain.