Manama I February 25, 2021
The Bahrain headquartered leading Islamic banking multinational, Al Baraka Banking Group BSC (ABG), which is traded at Bahrain Bourse and Nasdaq Dubai (under the trading code "BARKA"), today announced a net loss of US$ (0.4) million attributable to equity holders of the parent in the fourth quarter of 2020, compared to a net income of US$ 22 million attributable to equity holders for the same period of 2019. The basic and diluted earnings per share for the fourth quarter of 2020 was US Cents (1.30) compared to US Cents 0.73 for the same period of 2019. Total operating income reached US$ 301 million compared to US$ 290 million, an increase of 3%. Net operating income of the Group increased by 12% in the fourth quarter, to reach US$ 147 million compared to US$ 131 million in for the same period of 2019. Total net income of the Group decreased by 31% in the fourth quarter, to reach US$ 34 million compared to US$ 48 million in for the same period of 2019.
With regards to the results of the year 2020, the Group achieved a net income of US$ 67 million attributable to equity holders of the parent compared to US$ 106 million for the same period of 2019, with a decline of 37%. The basic and diluted earnings per share for the year 2020 was US Cents 2.90 compared to US Cents 6.01 for the same period of 2019. Total operating income of the Group increased by 18% in 2020, to reach US$ 1.140 billion compared to US$ 967 million in 2019. An indication of the Group's success in controlling the expenses is the net operating income, which increased by 45% to reach US$ 579 million in 2020, when compared to US$ 399 million in 2019. Total net income reached US$ 166 million compared to US$ 180 million, a decrease of 8%.
The decrease in the net income was because of Group’s allocation of a significant increase in precautionary provisions to offset the adverse effect resulting from the negative economic impact of the COVID-19 pandemic on the businesses of the Group and its units. These provisions increased by 138% to reach US$ 290 million in 2020 compared to US$ 122 million in 2019.
In regards to the balance sheet items, the equity attributable to the parent's shareholders and Sukuk holders amounted to US$ 1.42 billion by end of December 2020 compared to US$ 1.47 billion by the end of December 2019. This reflected a decline of 3% due to foreign currency translation reserve, payment of cash dividends and payment of Tier 1 profits during the year. Total equity reached to US$ 2.22 billion by end of December 2020, compared to US$ 2.32 billion by end of December 2019, showing a decrease of 4%, due to the same reason.
Total assets of the Group showed an increase of 8% by end of December 2020 to reach US$ 28.25 billion compared to US$ 26.26 billion by the end of December 2019. During the year 2020, the Group focused on maintaining a large portion of these assets in the form of liquid assets in order to face any emergency requirements of the units, largely due to COVID-19 pandemic.
Operating assets (financing and investments) amounted to US$ 21.65 billion as on end December 2020, compared to US$ 19.75 billion as on the end December 2019, registering an increase by 10%. Customer accounts including dues to banks and financial institutions as at the end of December 2020 reached US$ 24.37 billion, an increase of 8%, when compared to the US$ 22.46 billion level at the end of December 2019, and this represents 86% of total assets, which points towards continued customer confidence and loyalty in the Group and the growing customer base.
Commenting on the Group’s performance and results during the year 2020, the Chairman of the Board of Directors of Al Baraka Banking Group, Mr. Abdullah Saleh Kamel said, “The Corona pandemic has swept the world since the beginning of the year 2020, and this has resulted in massive and wide-ranging humanitarian, social and economic repercussions. Through our units spread across 17 countries, we were able to face these challenges and limit their effects on our Group and our units. We worked very closely, together with our clients, individuals, companies and governments, in order to mitigate these repercussions by taking a set of operational and financial precautionary initiatives, which bore fruit, thank God, in the good results achieved in the year 2020. "
Mr. Abdullah Saleh Kamel added, “Going forward, we shall to continue with the requisite processes for converting the Group’s current Wholesale Banking license in the Kingdom of Bahrain to a Category 1 Investment Firm license, subject to receiving the necessary approvals from the Central Bank of Bahrain (“CBB”), under whose regulatory supervision the Group would continue to operate. This transformation will enable the Group to streamline operations, enhance efficiency and make better use of its resources to serve its subsidiaries and other stakeholders, while continuing to provide strategic direction for all its subsidiaries.”
Member of the Board of Directors and Group Chief Executive Officer of Al Baraka Banking Group, Mr. Mazin Manna, said, "During the year 2020, we witnessed unprecedented challenges that the world has not seen for a long time, represented by the outbreak of the Covid-19 pandemic. The Group took the initiative to develop a comprehensive strategy, not just by focusing on maintaining financial strength but also providing the required support to the communities in which we work, as well as the individuals, institutions and companies that deal with us. At the same time, the Group ensured maintaining the sustainability of its services as well as the safety and protection of its employees.
“The onset of the pandemic motivated us even more to accelerate the implementation of our strategies in digital transformation in the Group and the units to transform our electronic networks into effective platforms to provide all banking services. We will attach great importance to this aspect during the forthcoming period, by developing a comprehensive plan, as digital banking will be the main channel for customer service and product delivery”.
The Group CEO further stated, “We will continue to invest in our risk management, compliance, governance framework and focus on institutional performance. As always, we attach great importance to investing in human resources and training, based on our belief in the importance of human capital in the success of our plans and programs. This is particularly true, since the pandemic has imposed the reformulation of many aspects of work culture and generated new risks that in turn require new skills”.
Mr. Manna concluded his statement by saying, “We are inspired by the principles and values instilled by the founder of the Group, late Sheikh Saleh Abdullah Kamel, may Allah have mercy on him. We also commend the great efforts made by the members of the Group's board of directors and the executive management in the head office and units. We also extend our thanks and appreciation to Mr. Adnan Ahmed Yousif, the former President & Chief Executive of the Group, and wish him success in his future endeavors”.
This press release in addition to the financial statements are available on the Bahrain Bourse and Group website at: www.albaraka.com
About Al Baraka
Al Baraka Banking Group B.S.C. (“ABG”) is licensed as an Islamic wholesale bank by the Central Bank of Bahrain and is listed on Bahrain Bourse and Nasdaq Dubai. It is a leading international Islamic banking group providing its unique services in countries with a population totaling around one billion.
The Group has a wide geographical presence in the form of subsidiary banking units and representative offices in 17 countries, which in turn provide their services through around 700 branches. Al Baraka Banking Group has operations in Jordan, Egypt, Tunis, Bahrain, Sudan, Turkey, South Africa, Algeria, Pakistan, Lebanon, Saudi Arabia, Syria, Morocco and Germany, in addition to two branches in Iraq and representative offices in Indonesia and Libya.
ABG and its Units offer retail, corporate, treasury and investment banking services, strictly in accordance with the principles of the Islamic Shari'a. The authorized capital of ABG is US$ 2.5 billion.
S&P Global Ratings has updated the long-term rating on Al Baraka Banking Group B.S.C. to 'BB-' with a 'Stable' Outlook, while affirming the 'B' short-term rating of the bank.
ABG has also been rated BBB+ (long term) / A3 (short term) by Islamic International Rating Agency (IIRA). IIRA has also rated ABG on the national scale at A+ (bh) / A2 (bh) with a fiduciary score of 81-85, the highest level amongst Islamic Financial Institutions in the region.
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With regards to the results of the year 2020, the Group achieved a net income of US$ 67 million attributable to equity holders of the parent compared to US$ 106 million for the same period of 2019, with a decline of 37%. The basic and diluted earnings per share for the year 2020 was US Cents 2.90 compared to US Cents 6.01 for the same period of 2019. Total operating income of the Group increased by 18% in 2020, to reach US$ 1.140 billion compared to US$ 967 million in 2019. An indication of the Group's success in controlling the expenses is the net operating income, which increased by 45% to reach US$ 579 million in 2020, when compared to US$ 399 million in 2019. Total net income reached US$ 166 million compared to US$ 180 million, a decrease of 8%.
The decrease in the net income was because of Group’s allocation of a significant increase in precautionary provisions to offset the adverse effect resulting from the negative economic impact of the COVID-19 pandemic on the businesses of the Group and its units. These provisions increased by 138% to reach US$ 290 million in 2020 compared to US$ 122 million in 2019.
In regards to the balance sheet items, the equity attributable to the parent's shareholders and Sukuk holders amounted to US$ 1.42 billion by end of December 2020 compared to US$ 1.47 billion by the end of December 2019. This reflected a decline of 3% due to foreign currency translation reserve, payment of cash dividends and payment of Tier 1 profits during the year. Total equity reached to US$ 2.22 billion by end of December 2020, compared to US$ 2.32 billion by end of December 2019, showing a decrease of 4%, due to the same reason.
Total assets of the Group showed an increase of 8% by end of December 2020 to reach US$ 28.25 billion compared to US$ 26.26 billion by the end of December 2019. During the year 2020, the Group focused on maintaining a large portion of these assets in the form of liquid assets in order to face any emergency requirements of the units, largely due to COVID-19 pandemic.
Operating assets (financing and investments) amounted to US$ 21.65 billion as on end December 2020, compared to US$ 19.75 billion as on the end December 2019, registering an increase by 10%. Customer accounts including dues to banks and financial institutions as at the end of December 2020 reached US$ 24.37 billion, an increase of 8%, when compared to the US$ 22.46 billion level at the end of December 2019, and this represents 86% of total assets, which points towards continued customer confidence and loyalty in the Group and the growing customer base.
Commenting on the Group’s performance and results during the year 2020, the Chairman of the Board of Directors of Al Baraka Banking Group, Mr. Abdullah Saleh Kamel said, “The Corona pandemic has swept the world since the beginning of the year 2020, and this has resulted in massive and wide-ranging humanitarian, social and economic repercussions. Through our units spread across 17 countries, we were able to face these challenges and limit their effects on our Group and our units. We worked very closely, together with our clients, individuals, companies and governments, in order to mitigate these repercussions by taking a set of operational and financial precautionary initiatives, which bore fruit, thank God, in the good results achieved in the year 2020. "
Mr. Abdullah Saleh Kamel added, “Going forward, we shall to continue with the requisite processes for converting the Group’s current Wholesale Banking license in the Kingdom of Bahrain to a Category 1 Investment Firm license, subject to receiving the necessary approvals from the Central Bank of Bahrain (“CBB”), under whose regulatory supervision the Group would continue to operate. This transformation will enable the Group to streamline operations, enhance efficiency and make better use of its resources to serve its subsidiaries and other stakeholders, while continuing to provide strategic direction for all its subsidiaries.”
Member of the Board of Directors and Group Chief Executive Officer of Al Baraka Banking Group, Mr. Mazin Manna, said, "During the year 2020, we witnessed unprecedented challenges that the world has not seen for a long time, represented by the outbreak of the Covid-19 pandemic. The Group took the initiative to develop a comprehensive strategy, not just by focusing on maintaining financial strength but also providing the required support to the communities in which we work, as well as the individuals, institutions and companies that deal with us. At the same time, the Group ensured maintaining the sustainability of its services as well as the safety and protection of its employees.
“The onset of the pandemic motivated us even more to accelerate the implementation of our strategies in digital transformation in the Group and the units to transform our electronic networks into effective platforms to provide all banking services. We will attach great importance to this aspect during the forthcoming period, by developing a comprehensive plan, as digital banking will be the main channel for customer service and product delivery”.
The Group CEO further stated, “We will continue to invest in our risk management, compliance, governance framework and focus on institutional performance. As always, we attach great importance to investing in human resources and training, based on our belief in the importance of human capital in the success of our plans and programs. This is particularly true, since the pandemic has imposed the reformulation of many aspects of work culture and generated new risks that in turn require new skills”.
Mr. Manna concluded his statement by saying, “We are inspired by the principles and values instilled by the founder of the Group, late Sheikh Saleh Abdullah Kamel, may Allah have mercy on him. We also commend the great efforts made by the members of the Group's board of directors and the executive management in the head office and units. We also extend our thanks and appreciation to Mr. Adnan Ahmed Yousif, the former President & Chief Executive of the Group, and wish him success in his future endeavors”.
This press release in addition to the financial statements are available on the Bahrain Bourse and Group website at: www.albaraka.com
About Al Baraka
Al Baraka Banking Group B.S.C. (“ABG”) is licensed as an Islamic wholesale bank by the Central Bank of Bahrain and is listed on Bahrain Bourse and Nasdaq Dubai. It is a leading international Islamic banking group providing its unique services in countries with a population totaling around one billion.
The Group has a wide geographical presence in the form of subsidiary banking units and representative offices in 17 countries, which in turn provide their services through around 700 branches. Al Baraka Banking Group has operations in Jordan, Egypt, Tunis, Bahrain, Sudan, Turkey, South Africa, Algeria, Pakistan, Lebanon, Saudi Arabia, Syria, Morocco and Germany, in addition to two branches in Iraq and representative offices in Indonesia and Libya.
ABG and its Units offer retail, corporate, treasury and investment banking services, strictly in accordance with the principles of the Islamic Shari'a. The authorized capital of ABG is US$ 2.5 billion.
S&P Global Ratings has updated the long-term rating on Al Baraka Banking Group B.S.C. to 'BB-' with a 'Stable' Outlook, while affirming the 'B' short-term rating of the bank.
ABG has also been rated BBB+ (long term) / A3 (short term) by Islamic International Rating Agency (IIRA). IIRA has also rated ABG on the national scale at A+ (bh) / A2 (bh) with a fiduciary score of 81-85, the highest level amongst Islamic Financial Institutions in the region.
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