Arab Banking Corporation announces 27% increase in first quarter profit to $71m
Arab Banking Corporation (ABC) announced that its consolidated Group net profit for the first quarter of 2014 was $71m, 27% higher than the profit of $56m reported in the first quarter of last year.
Business volumes grew in line with ABC’s expansion plans, resulting in improved revenues across all the geographies that ABC operates in. However, currency translation from the stronger dollar resulted in a 2% decline in operating income for the quarter to $226m compared to the first quarter of last year. Operating expenses at $103m decreased by $10m resulting in cost/income ratio of 46%, a decrease of 3%, benefiting from the restructuring initiatives taken last year, besides the impact of currency translation. Recoveries and continued vigilance over asset quality resulted in net impairment provisions of $8m, sharply lower than the previous year’s $28m which was impacted by some exceptional provisions.
ABC Group’s total assets stood at $27.9bn at the end of the first quarter compared to $26.5bn at 2013 year-end, reflecting growth in loan volumes and other short-term liquid assets. The ratio of NPLs (non-performing loans) to gross loans declined to 2.7% from 3.0% at year-end 2013.
Deposits increased by $1.2bn during the quarter to reach $19.5bn supporting ABC’s growth strategy. Liquidity continues to be at comfortable levels with liquid assets to deposits ratio at 62%.
Shareholders’ equity at 31 March 2014 stood at $3,897m following the distribution of 5% dividend to the shareholders. ABC Group’s capital adequacy ratio at 21.3% was substantially above the regulatory minimum (12%) and comprised of predominantly Tier 1, which totalled 17.7%.
ABC’s Chairman, Mr. Saddek El Kaber, commented that “I am pleased with the excellent start to the year following the steadily growing results of the last five years. With continued emphasis on carefully planned expansion I am confident that ABC Group will continue to flourish despite the challenging environments that some of the ABC units operate in.”
ABC is a leading player in the region’s banking industry and provides innovative wholesale financial products and services that include corporate banking, trade finance, project and structured finance, syndications, treasury products and Islamic banking. It also provides retail banking services through its network of retail banks in Jordan, Egypt, Tunisia and Algeria.
For more information please contact:
CFO, Manama, Bahrain
Arab Banking Corporation (ABC)
Telephone +973 17543223