Net Income of Al Baraka Banking Group Jumped by 13% to US$166 Million in the First Nine Months of 2011
The Bahrain based leading Islamic banking group, Al Baraka Banking Group B.S.C (ABG) announced that it has achieved a net income of US$ 166 million in the first nine months of 2011, an increase of 13% on the net income achieved in the first nine months of 2010. Similarly, statement of financial positions witnessed moderate increases. Total assets increased by 3%, and deposits by 4% as at the end of September 2011 as compared with the end of December 2010. These results come on the base of the continuation of the Group's excellent financial performance based on the prudent business strategies, by which, the Group was able to overcome the negative effects of global and regional economic and political conditions and to further expanding of business, branch network and to enter new markets.
The financial statements of the Group for the nine months of 2011 showed that the continued expansion in business reflected positively on income, with total operating income of US$ 535 million in the first nine months of 2011, an increase of 15% over the same period in 2010. After deducting all operating expenses, net operating income amounted US$ 252 million in first nine months of 2011, which represents an increase of 11% compared to the net operating income during the same period of 2010. The net income amounted to US$ 166 in first nine months of 2011 compared to US$ 147 million in first nine months of 2010, which reflects an increase of 13%. The net income attributable to equity holders of the parent amounted US$ 97 million compared to US$ 83 million for the same period last year, which represent an increase of 17%. This increase was achieved despite the increases in the operating expenses of the Group on account of further expansion in the branch network, and enhancements in IT infrastructure and human resources.
The total assets of the Group amounted to US$ 16.4 billion as at the end of September 2011, an increase of 3% over the comparative figure as at the end of 2010. Financing and investments amounted to US$ 11.4 billion as at the end of September 2011. Customer deposit and other accounts and equity of investment accountholders have also witnessed an increase of 4% from US$ 13.6 billion at the end of December 2010 to US$ 14.1 billion at the end of September 2011, which indicates continued customer confidence and loyalty to the Group. Total equity at the end of September 2011, amounted to US$ 1.8 billion.
As for the results of the third quarter of 2011, net income amounted to US$ 56 million, compared to US$ 53 million for the same period of last year, an increase of 7%. Total operating income increased to US$ 182 million in the third quarter of 2011, an increase of 16% compared to the same period of last year. Net operating income increased to US$ 82 million, a growth of 9% compared to the same period of 2010. The net income attributable to equity holders of the parent for the third quarter of 2011 amounted US$ 33 million, which represent an increase of 14% compared to the same period of 2010.
Commenting on these results, Sheikh Saleh Abdullah Kamel, Chairman of Al Baraka Banking Group, said "We are very proud to see continuing growth in the revenue and business of Al Baraka Banking Group and further elevation in its regional and global standing with the near end of 2011, this year which is considered exceptional by all standards given the continuation of difficult economic and financial conditions and extremely complicated Arab political developments. We consider the outstanding results achieved in first nine months of 2011 as an embodiment of the success of the business model that we followed since the founding of the Group, a model that reflects the true values of Islamic banking and far-sighted business strategies, supported by outstanding management expertise capable of creatively translating these values and strategies to facts on the ground. Therefore, we are optimistic about the future, and we make every effort to serve the communities in which we operate and provide products with high added value that contribute to their development and evolution. "
For his part, Mr. Abdulla Ammar Al Saudi, Deputy Chairman of ABG, said that " The Group financial results achieved in the nine months of 2011 confirm that despite the repercussion of the global crisis and successive political and social developments witnessed by some of the countries where the Group operate, the activities of the Group and its subsidiary units continued their steady growth. This reflect the success of the business strategies implemented by the Group that are based on their strong capital, human and technical resources, wide network of branches, and their firmly established presence in the markets. These business strategies that we at the Board of Directors of the Group have put in place based on the highest professional values, principles and standards that we embodied in all the programs, services and products that the Group offers".
Mr. Adnan Ahmed Yousif, Member of the Board of Directors and President & Chief Executive of Al Baraka Banking Group, said "the excellent results that we achieved in the first nine months of 2011 were the outcome of a number of initiatives that we had launched during the year, including continually improving the quality of our products and services, introducing more innovative products, expanding the branch network of ABG subsidiary units, strengthening relationships with our partners, investors and customers, and entering new markets as well as modernizing and developing our human, operational, regulatory and technical infrastructures both at Group level and subsidiary banking units levels. All these initiatives have contributed to maximizing the returns to the shareholders and investors of the Group, thanks to the wide range of expertise we posses in the markets in which our units operate and the Group's substantial financial and technical resources and the wide geographic network of the subsidiary units of the Group".
With regard to the Group's plans to expand its branch network, the President & Chief Executive said that "the subsidiary units of the Group in Turkey, Jordan, Algeria, Egypt, Syria and Bahrain have resumed expansion by opening new branches and this had direct positive impact on growing their deposit base and financing portfolios. We expect the number of branches of ABG banking units to exceed 500 over the next three years".
Mr. Adnan added "the work is continuing, according to the planned timetable, on the construction of the Group Headquarter located in Bahrain Bay by the Arabtec Construction Company which is one of the largest contracting companies in the Arab world. The US$ 100 mm new Headquarter of the Group is designed to meet the present and future needs of the Group. The choice of the Bahrain Bay for the construction of its headquarters stems from the belief of the vital importance enjoyed by the Kingdom of Bahrain as a financial and Islamic banking center both regionally and globally. Therefore, the site will support the requirements for success of Al Baraka Banking Group, regionally and globally and, it is consistent with our future goals and aspirations.
Reflecting the continuation of our units with the implementation of their expansion programs in accordance with the agreed plans, Al Baraka Bank Algeria singed the contracts for the establishment of the Bank's headquarters in the Algerian capital. The contracts were signed in Istanbul and will be implemented by the Turkish Company "Aslan Turkey". The new headquarters of the Bank is located in strategic location of the business center in the Algerian capital, near the major centers, and consists of 16 floors, including four underground floors. Land area totals 17,470 square meters, and contains many offices that are designed with the modern technology, halls for lectures, meeting rooms, as well as parking spaces, and other modern services. This project comes within the framework of our efforts towards the provision of best banking services to our customers in Algeria, our determination to move forward in strengthening its presence in the Algerian market and to contribute positively to the development of the Algerian economy.
Al Baraka Turk also completed arrangements to obtain a syndicated Murabaha facility. As a result of great demand, the amount of the facility was raised from US$ 150 million to US$ 350 million. This move comes in the framework of the Bank's strategy of continued expansion in the Turkish market and seizing abundant investment and financing opportunities in the market.
Also, Al Baraka Turk gave the mandate for four international banks to issue Islamic Sukuk of US$ 200 million in its favor, in an advanced step to develop Islamic finance market in Turkey, which will reflect positively also on the structure of the financial resources of the Bank on the one hand, and strengthening its role in servicing Islamic banking sector and financing investment and financing opportunities in the Turkish market on the other.
Mr. Adnan added "the business of our unit in Pakistan, Al Baraka Bank Pakistan is carried out in a good manner. The Bank continues implementing its expansion programs in terms of both assets and branch network, with total assets reaching US$ 776 million and network of 89 branches covering all major cities and regions in Pakistan".
The President& Chief Executive of the Group added that "We are optimistic about the future, where we see the steady progress in the performance of all our banking units, including in those countries experiencing political transition at the present time, as our strategies in these countries based on long-term commitment to contribute to their development and evolution. In accordance with our new strategy, we have many plans and initiatives that we intend to implement during 2011. These include launching new innovative products and services in the markets as well as enhancing the standing of ABG in the international markets. All of these plans will be implemented, God willing, successfully considering that we are the only Islamic banking group that has such diversity of geographical presence and excellent knowledge of the markets".
The President& Chief Executive of ABG concluded his statement by praising the tireless efforts of the executive management at Group Head Office, the executive management teams of the banking units of Al Baraka Banking Group and related parties that played an instrumental role in achieving these excellent results for the Group.
On this occasion, Sheikh Saleh Abdulla Kamel, Chairman of Al Baraka Banking Group, Mr. Abdulla Ammar Al Saudi, Deputy Chairman, Mr. Abdulla Saleh Kamel, Deputy Chairman, and Mr. Adnan Ahmed Yousif, ABG President & Chief Executive and all Members of the Board of Directors of ABG expressed their sincere thanks to the Ministry of Industry and Commerce, Central Bank of Bahrain, Bahrain Bourse and Nasdaq Dubai for the cooperation and assistance they extended to the Group since it was established. They also extended their thanks to all the Central Banks in the countries in which Group banks operate and to all investors and customers for their continued support. They also thanked all the employees of the Group for their loyalty, hard work and dedication which stand behind the successes and achievements of the Group.
Al Baraka Banking Group (ABG) is a Bahrain Joint Stock Company listed on Bahrain Bours and Nasdaq Dubai stock exchanges. It is a leading international Islamic bank with Standard and Poors investment grade long term counterparty credit rating of BBB- / A-3 (Short Term) with a Negative Outlook. ABG offers retail, corporate and investment banking and treasury services strictly in accordance with the principles of the Islamic Shari'a. The authorised capital of ABG is US$1.5 billion, while total shareholders' equity amounts to about US$1.8 billion. The Group has a wide geographical presence in the form of subsidiary banking Units and representative offices in twelve countries, which in turn provide their services through more than 400 branches. These banking Units are Jordan Islamic Bank, Al Baraka Islamic Bank Bahrain, Al Baraka Bank Pakistan Limited; Banque Al Baraka D'Algerie, Al Baraka Bank Sudan; Al Baraka Bank Limited, South Africa; Al Baraka Bank Lebanon; Al Baraka Bank Tunisia; Al Baraka Bank Egypt; AlBaraka Turk Participation Bank, Al Baraka Bank Syria and representative offices in Indonesia and Libya (under formation).
Main Performance Indicators:
Nine months period ended 30 September 2011 compared with same period of 2010 Growth (%)
Increase in total operating income 15%
Increase in net operating income 11%
Increase in net income 13%
At 30 September 2011 compared with 31 December 2010 Growth (%)
Increase in total assets 3%
Increase in total deposits including equity of investment accountholders 4%
Three months period ended 30 September 2011 compared with same period of 2010 Growth (%)
Increase in total operating income 16%
Increase in net operating income 9%
Increase in net income 7%
ABG Financial AD