News   

   2016
   
 

Al Baraka Banking Group Net Profits Raise by 4% to US$ 286 million in 2015, Total Operating Income Reached US$ 1 billion for the First Time and Total Assets Reached US$ 25 billion

Manama, 21 February 2016:

The Bahrain based leading Islamic banking group, Al Baraka Banking Group B.S.C (ABG) announced that its total operating income reached one billion dollars in 2015 for the first time since the start of the Group activities 12 years ago due to continued growth in income-generated business at all the Group units, while the net income for the year reached US$ 286 million in 2015, an increase of 4% on the net income achieved in 2014. Similarly, balance sheet items witnessed moderate increases as total assets increased by 5%, total finance and investments by 4%, customer accounts by 2% while total equity increased by 1% as at the end of December 2015 in comparison with the end of December 2014. These excellent results were achieved despite the adverse effects of the appreciation of US currency against the currencies of countries where a number of our units operate and the economic and financial fluctuations regionally and internationally.

Commenting on these results, HE Sheikh Saleh Abdullah Kamel, Chairman of Al Baraka Banking Group, said " The year 2015 witnessed an increase in the difficult economic and political conditions regionally and globally, especially during the second half of the year with the China reduced the value of its currency, which sparked off fears of the prospects for the global recovery, and extended oil losses, while the security tensions continued in the region and generated an extremely cautious environment for banks. Therefore 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. This embodied once again the success of the business model that we followed since the founding of the Group, a model that reflects the true values of socially-responsible Islamic banking, supported by distinct human expertise and large and diversified technical and financial resources, which all have contributed to the translation of that model to the ambitious objectives and strategies and growing financial results and profitability. All these efforts were culminated with the transfer of the Group to the main headquarters in Bahrain Bay at the end of the last year, which is an architectural masterpiece that is equipped with all modern techniques and facilities, and would allow the Group to launch a new stage in its activities and businesses".

For his part, Mr. Abdulla Ammar Al Saudi, Vice Chairman of ABG, said that "In 2015, the weak economic growth experienced in the majority of developed and developing  countries was by and large replicated in the countries in which ABG operates. In the challenging conditions prevailing, not least of which was the depreciation of the domestic currencies of several of ABG's subsidiaries respective to the US dollar - the Group's currency of report - ABG did well to maintain its record of growth and steadily increasing profitability, thanks to wise policies and strategies developed by the Group and are being implemented by all units".

Mr. Adnan Ahmed Yousif, Member of the Board of Directors and President & Chief Executive of Al Baraka Banking Group, said "The outstanding results achieved during 2015, embodies our determination to implement all the initiatives that we planned for launch early this year, defying all economic and political datum regionally and globally, and which generated difficult operating and technical conditions for banks in the region. The most important of these initiatives has been to continue improving the quality of 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 our deep experience in the markets were we operate in addition to large financial and technical resources and the wide branch network of our units".

"We are very pleased to see the contribution of all our banking units in the growth of profits of the Group, which reflects the sound financial positions enjoyed by these units. Coincided with this, the cooperation between the Group's units in trade financing activities for MENA countries have increased, which contributed to the emergence of the role of the Group as a key player in promoting trade and investment between these countries".

"The end of last year saw a luminous turning point in the march of Al Baraka Banking Group, where we moved to the new headquarters of the Group in Bahrain Bay. The cost of the project is around US$ 100 million. We are very pleased for the completion of this distinctive and unique of its kind architectural edifice. Such efforts were not possible without the availability of atmosphere of stability and security in the Kingdom of Bahrain, in addition to the many facilities offered by the concerned official bodies, and full confidence in the performance of the national economy in the short and long term, all of which are factors that strengthen the confidence of major financial institutions in the Kingdom, and stimulated them to move forward in the implementation of their vital projects, which no doubt will have many positive repercussions on economic development in Bahrain. The new Headquarter of the Group is designed to meet its present and future needs. 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. This project embodies a dream for us to see the new headquarters of the Group constructed on latest architectural style and equipped with latest modern equipment and facilities, and 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".

With regard to the Group's plans to expand its branch network, the President & Chief Executive said that "Most of our units continued in 2015 to open new branches, where total new branches opened in 2015 reached 38 branches to bring total branches to 587 branches with total staff of 11,458 at the end of December 2015. This reflects our determination to consolidate and expand our activities in the countries where we operate currently. We would also like to refer here, in particular, to the role of the expansion of the branches in the creation of rewarding jobs to citizens in the communities in which we operate, which is reflected in the total number of Group employees. There is no doubt that the success in achieving this translates one of the main pillars of the banking business model, which is committed by the Group".

"In terms of geographical expansion, we finished, by God Praise, from the legal requirements of our application to establish a banking unit in Morocco, which will serve as a major achievement on the  level of entry to this important and large market with rich opportunities, and thus will complete our presence network in all the Arab Maghreb countries approximately".

"During September 2015, our unit in Turkey, Al Baraka Turk Participation Bank, had concluded a syndicated Sharia compliant Murabaha financing, raising a total of US$450 million divided in US$ 278 million and EUR 154.5 million. A number of 17 famous international banks from 11 countries participated in the facility covering all main world financial centers. We are indeed delighted at the large success of the syndicated Murabaha financing deal, despite the volatile financial markets and international economic situation, which  endorses the reputation of Al Baraka Turk Participation Bank and its distinguished position in the Turkish market, based on the strength of its financial position and growing performance over the past many ears, as well as the distinguished reputation and position of the parent company, Al Baraka Banking Group, regionally and internationally".

"During the same month also, Dagong Global Credit Rating Company Limited (Dagong) and Islamic International Rating Agency (IIRA) jointly reaffirmed the international investment grade credit rating of Al Baraka Banking Group at 'BBB+/A3' (Triple B Plus / A Three). In addition, IIRA has reaffirmed ABG's national scale rating at 'A+(bh)/A2(bh)' (Single A Plus / A Two). Outlook on the assigned ratings is 'Stable'.  IIRA has also reassessed the group's overall fiduciary score in the range of '76-80', which indicates strong fiduciary standards and a well-developed governance structure, wherein rights of various stakeholders are well defined and protected. Standard & Poor's continued to rate the Group at BB+ (long term) / B (short term) with stable outlook".

"Corresponding with the launch of its Social Responsibility Report at the end of last year, Al Baraka Banking Group also announced its 2016-2020 Social Responsibility Priorities, where the Group was keen to link them with the Global Goals for Sustainable Development, which was adopted by the United Nations' General Assembly on September 25, 2015. The Group's development goals of the social responsibility program for the next five years will concentrate on adding 50,000 jobs across the countries we operate in as a result of financing new and existing customers operations.  They will concentrate also on financing and donating to a variety of educational institutions and children hospitals, cancer hospitals, diabetic hospitals, kidney dialysis units.  We will work with customers that are more closely aligned with the above Al Baraka Social Responsibility Priorities and the Global Goals for Sustainable Development".

"During 2015, four units of ABG won Islamic Finance News Awards as the Best Islamic Banks in the region through the annual comprehensive referendum conducted by the Foundation of Islamic Finance News. Al Baraka Islamic Bank won the award as the Best Islamic Bank in Bahrain, Al Baraka Bank Lebanon won the award as the Best Islamic Bank in Lebanon and Al Baraka Bank Sudan won the award as the Best Islamic Bank in Sudan for the second successive year. Furthermore, Jordan Islamic Bank won the award as the Best Islamic Bank in Jordan".

"For the third successive year, ABG and six of its subsidiary banking units received the "Best Islamic Financial Institution" Award of 2015, as part of the annual awards that the Global Finance magazine, which is specialized in banking and finance, awards to international banks and financial institutions. Al Baraka Banking Group received the "Best Islamic Financial Institution in Middle East / North Africa" Award, Al Baraka Bank Syria received the "Best Islamic Financial Institution in Syria" Award, Jordan Islamic Bank received the "Best Islamic Financial Institution in Jordan" Award, Al Baraka Bank Egypt received the "Best Islamic Financial Institution in Egypt, Al Baraka Islamic Bank Bahrain received the "Best Islamic Financial Institution in Bahrain" Award, Banque Al Baraka D'Algerie received  the "Best Islamic Financial Institution in Algeria" Award and Itqan Capital (Saudi Arabia) received "Best Up-and-Comer" Award".

Mr. Adnan added: "We focused over the last year in particular on providing modern online training programs for the employees of the Group and its units that are related to compliance, sanctions and KYC regulations and others. In addition, we continued leveraging the advantages of the unifying the IT network amongst the units and to modernize  the institutional, human and technical infrastructure of the Group  and to extend governance rules, training and compliance with international laws such as FATCA, AML, CFT and risk management in according with latest international standards".

The President & Chief Executive of the Group added, "We intend to implement many plans and initiatives during the 2016. These will include opening new branches, entering new markets, launching new and innovative products and services in our markets, improving the internal operating environment technically and professionally, enhancing the unified culture related to the Group's corporate identity, increasing inter-unit business amongst Al Baraka Units, as well as enhancing the standing of ABG in the international markets as a whole. We once again stress on our determination to continue to invest our substantial financial resources and expertise and the wide geographic network of the units of the Group towards maximizing the returns for our shareholders and the investors in the Group".

The financial statements of the Group for 2015 showed that the continued expansion in business reflected positively on income, with total operating income reaching US$ 1 billion in 2015 for the first time, an increase of 9% over 2014. After deducting all operating expenses, which increased by 3%, net operating income reached US$ 464 million in year 2015 compared to US$ 396 million in 2014, representing a remarkable increase of 17%. The increase in operating expenses was due to expansion in branch network and enhancement in technical and human infrastructure. As a result of the increase in provisions and taxes, the net income amounted to US$ 286 million in 2015 compared to US$ 275 million in 2014, an increase of 4%. Net income attributable to the equity holders of the parent reached US$ 163 million during 2015 comparing to US$ 152 million last year, showing an increase of 7%.

The total assets of the Group amounted to US$ 24.6 billion as at the end of December 2015, an increase of 5% over the comparative figure as at the end of 2014. Financing and investments amounted to US$ 18.4 billion as at the end of December 2015 compared to US$ 17.6 billion at the end of December 2014, an increase of 4%. Customer accounts have witnessed a moderate increase of 2% from US$ 19.9 billion at the end of December 2014 to US$ 20.2 billion at the end of December 2015, which indicates the continued customer confidence and loyalty in the Group and growing customer base and expansion in the branch network. Total equity reached around US$2.1 billion at the end of 2015, representing an increase of 1% over 2014.

The results of the fourth quarter of 2015 saw very large improvements, where net income amounted to US$ 72 million, compared to US$ 68 million for the same period of last year, an increase of 6%. The net operating income reached US$ 130 million during the fourth quarter of 2015 compared to US$ 99 million for the same period in 2014, a remarkable increase of 31%, which reflects the strong performance of the Group during this period. Net income attributable to the equity holders of the parent reached US$ 42 million during the fourth quarter of 2015 representing an increase of 15% compared to the same period last year.

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 planned results for the Group.

On this occasion, Sheikh Saleh Abdulla Kamel, Chairman of Al Baraka Banking Group, Mr. Abdulla Ammar Al Saudi, Vice Chairman, Mr. Abdulla Saleh Kamel, Vice 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 the 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 (B.S.C) is licensed as an Islamic wholesale bank by the Central Bank of Bahrain, listed on Bahrain Bourse and Nasdaq Dubai stock exchanges. It is a leading international Islamic banking group providing its unique services in countries with a population totaling around one billion. It is jointly rated BBB+ (long term) / A3 (short term) on the international scale and A+ (bh) (long term) / A2 (bh) (short term) on the national scale with a Stable outlook by Islamic International Rating Agency & Dagong Global Credit Rating Company Limited, and by Standard & Poor's at BB+ (long term) / B (short term) with a Stable outlook. Al Baraka offers retail, corporate, treasury and investment banking services, strictly in accordance with the principles of the Islamic Shari'a. The authorized capital of Al Baraka is US$ 1.5 billion, while total equity is at about US$ 2.1 billion.

The Group has a wide geographical presence in the form of subsidiary banking units and representative offices in fifteen countries, which in turn provide their services through over 587 branches. Al Baraka currently has a strong presence in Turkey, Jordan, Egypt, Algeria, Tunisia, Sudan, Bahrain, Pakistan, South Africa, Lebanon, Syria, Iraq and Saudi Arabia, including two representative offices in Indonesia and Libya.

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