Bank ABC Islamic announces first half 2022 net profit of US$20.7 million

Bank ABC Islamic - today announces its results for the first half ending 30 June 2022: 

The Bank closed the first half with net profit of US$ 20.7 million, 7.8% higher than the same period last year. Net operating income before credit losses for the six month period ending 30 June 2022 stood at US$ 23.1 Million also 7.8% higher on a year-on-year basis. The growth in income and profitability is at the back of substantial pick up in core customer business as well as a higher profit rate environment. This is despite the headwinds that the Bank faces on account of uncertainty on the global geo-political front as well as high inflationary environment. Most product areas have performed well during this period except for capital markets business, which remains subdued because of volatility in the market caused by the geo-political situation. 

Key Highlights of first half Performance

• Net profit of US$ 20.7 million, 7.8 % higher than same period last year 
• Net operating income before credit losses of US$23.1 million, 7.8% higher than the same period 2021. 
• Operating expenses were US$4.2 million, 25.8% higher compared to US$3.3 million for last year. 
• The bank’s capital base remains very strong with a capital adequacy ratio of 36.2%.

Commenting on the results, Mr. Hammad Hassan, Managing Director of Bank ABC Islamic said, “We are very pleased with the growth witnessed in our core banking business during first half of the year, despite markets remaining challenging on account of geo-political factors and high inflationary environment. The coverage and product teams are focused on new-to-bank customer acquisition as well as on offering innovative solutions to our client base. We are particularly delighted to have been recognized for our performance excellence as MENA Islamic Finance Bank of the year by MEED.  We remain on track with our expectations for performance in 2022 at the back of improvement in macroeconomic credit environment and the region benefiting from higher oil price.”

A more detailed summary of the Financial Results is explained below:

Business Performance (three-month period):

• Net profit for the second quarter was US$11.9 million compared to US$8.8 million reported in the second quarter of last year.
• Net operating income before credit losses was US$14 million compared to US$9.7 million for the same period of last year.
• Allowances for credit losses for the period were a write back of US$25 thousand compared to US$0.6 million reported during the same period last year.
• Operating expenses were US$2.1 million, compared to US$1.5 million for the same period of last year.

Business Performance (six-month period):

• Net profit for the first six months was US$20.7 million compared to US$19.2 million reported in the first six months of last year.
• Net operating income before credit losses was US$23.1 million compared to US$ 21.5 million for the same period of last year.
• Allowances for credit losses for the period were a write back of US$2 million compared to US$1.3 million reported during the same period last year.
• Operating expenses were US$4.2 million compared to US$3.3 million for the same period of last year.

Balance Sheet:

• ABC Islamic Bank’s total assets stood at US$2.293 billion as of June 30, 2022, compared to US$2.332 billion at 2021 year-end.
• Investments were at US$784 million, compared to US$852 million at 2021 year-end.
• Murabaha receivables and Ijarah were at US$1,440 million, compared to US$1,420 million at 2021 year-end.
• Shareholders’ equity on June 30, 2022, stood at US$291 million, compared to US$297 million at 2021 year-end, 2.1% lower, because of dividend payment offset by profit generated during the period.
• The bank’s capital base remains very strong with a capital adequacy ratio of 36.2%, predominantly Tier 1, which totalled 35.5%.