13 Nov 2014
MANAMA, BAHRAIN – 13 November 2014 – Ithmaar Bank, a Bahrain-based Islamic retail bank, announced today (ed note: 13/11/14) a total net profit of US$ 4.84 million for the nine-month period ended 30 September 2014, compared to a net loss of US$ 11.97 million reported for the same nine-month period last year. Net profit for the three month period ended 30 September 2014 amounted to US$3.06 million, as compared to net loss of US$4.45 million reported for the three month period ended 30 September 2013.
Net profit attributable to equity holders of the Bank for the nine-month period ended 30 September 2014 amounted to US$1.14 million, compared to a net loss of US$12.79 million reported in the same period last year. Net profit attributable to equity holders of the Bank for the three month period ended 30 September 2014 amounted to US$1.26 million, as compared to net loss of US$5.15 million reported for the three month period ended 30 September 2013.
The announcement, by Ithmaar Bank Chairman His Royal Highness Prince Amr Al Faisal, follows the review and approval by the Board of Directors of the Bank’s consolidated financial results for the nine-month period ended 30 September 2014.
“On behalf of the Ithmaar Bank Board of Directors, I am pleased to announce that Ithmaar Bank has reported profit and continues to grow its core retail banking operations,” said HRH Prince Amr. “The financial results show stable, consistent growth in Ithmaar Bank’s performance,” he said.
“In particular, I am pleased to announce that net income, before provisions for impairment and overseas taxation, has increased by 270 percent to US$29.93 million during the nine month period ended 30 September 2014, compared to US$8.10 million during the same period last year,” said HRH Prince Amr. “This increase is mainly due to sustainable revenue growth across most income streams,” he said.
“Our improved performance is evident from the growth in operating income, which increased by 17 percent to US$176.55 million, compared to US$150.56 million reported during the same period last year,” said HRH Prince Amr. “Total expenses for the nine-month period ended 30 September 2014, at US$146.62 million, are 2.92 percent higher than the same period in 2013, mainly due to the one-off expenses associated with the Staff Voluntary Separation Scheme and the full year impact in 2014 of certain branches opened in 2013 in Pakistan,” he said.
“I am also pleased to report that the balance sheet continues to be stable,” said HRH Prince Amr. “The equity of unrestricted investment account holders has increased by 5.4 percent to US$1.98 billion as compared to $1.88 billion as at 30 September 2013 and has remained stable at US$1.99 billion as of 31 December 2013. The Bank continues to reduce its cost of funding as part overall cost reduction initiative. Customer current accounts have increased to US$1.29 billion as at 30 September 2014, an increase of 10.08 percent compared to US$1.18 billion as at 30 September 2013 and increase of 1.8 percent compared to US$1.27 billion as at 31 December 2013, mainly due to the Bank’s continued focus on developing its core retail banking business and raising low cost funds. Liquid assets now represent 13.1 percent of the balance sheet as at 30 September 2014,” he said.
Ithmaar Bank Chief Executive Officer, Ahmed Abdul Rahim, said the results indicate that Ithmaar Bank is on track to realising its commitment to becoming one of the region’s premier Islamic retail banks.
“The 2014 financial results show stable, consistent growth in our core Islamic retail banking operations and continue to reflect improving operational efficiencies and increasing profitability,” said Abdul Rahim. “Murabaha and other financing increased to US$3.22 billion as at 30 September 2014, an increase of 2.8 percent from $3.13 billion as at 30 September 2013 and increase of 2 percent from $3.15 billion as at 31 December 2013,” he said.
“The above indicates growing customer commitments to Ithmaar Bank, and reflect both increasing confidence in, as well as demand for, the Bank’s products and services,” said Abdul Rahim. “This, in turn, is a result of Bank’s commitment to growing closer to its customer by listening closely to their requirements and working to continuously improve our offerings to help further enhance our customer’s Islamic banking experience,” he said.
“In line with that commitment, we enhanced and re-launched our popular prize-based savings account, Thimaar, to offer customers a chance to win both gold and cash,” said Abdul Rahim. “We also enhanced our home financing offering to allow customer greater flexibility and additional choices, as well as completive rates and an optional grace period,” he said.
“Earlier this month, we also added a new offsite Automated Teller Machine (ATM) to our retail banking network, already one of the largest in Bahrain,” said Abdul Rahim. “The new offsite ATM, which was installed in direct response to customer demands, brings the total number of ATMs in Ithmaar Bank’s retail banking network to 47, including 17 at full service branches, at strategic locations across Bahrain. Our large network of retail banking branches allows us to grow closer to our customers while we work on continuously enhancing our products and services,” he said
“Our key subsidiary, Faysal Bank Limited (FBL), with its 269 branches, is amongst the top 10 banks in Pakistan. Ithmaar Bank currently holds about 67% of Faisal Bank Limited, Pakistan (FBL). During the year, Ithmaar increased its representation of the Board of FBL to five directors out of eight directors. The new Board of Directors of FBL introduced several major changes in the Bank including management structure, business transformation and major cost saving initiatives. Such developments will positively reflect on the Bank’s performance in the coming years starting from 2015,” said Abdul Rahim.