The Bank ABC Islamic has announced a net profit of $19.2 million for the first half of 2021 reflecting the Bank’s success in returning to normal performance after absorbing the one-off exceptional fraud related impairment in 2020.
Other key highlights include the total operating income of US$21.5 million which is 8.1% lower than the same period last year mainly on account of low profit rate environment and slightly lower fee income.
Total operating expenses are 7.5% lower than the same period last year as a result of cost rationalization programs and staff, client activity not having reverted to pre-pandemic level.
However, the balance sheet remains strong with a capital adequacy ratio of 36.2 percent.
2nd quarter highlights
Net profit for the second quarter was $8.8 million compared to $8.7 million reported in the second quarter of last year.
Total operating income was $9.7 million compared to $9.9 million for the same period of last year.
Allowances for credit losses for the period were a write back of $0.6 million compared to $0.4 million reported during the corresponding period last year.
Operating expenses were US$1.5 million, compared to US$1.4 million for the same period of last year.
Balance Sheet
ABC Islamic Bank’s total assets stood at $1.998 billion as of June 30 compared to $2.314 billion at 2020 year-end.
Shareholders’ equity at June 30 stood at US$286 million, compared to US$293 million at 2020 year-end.
Commenting on the results, managing director of the bank, Hammad Hassan, said: “The bank has been able to recover to its normal performance after it has absorbed the impact of fraud related credit costs of 2020”.
He added that while the top line continues to be adversely impacted by a combination of lower profit rate environment and a slowdown in the business activity not having resumed to pre-pandemic level, the bank’s net profitability showed growth on a year-on-year basis.
“The operating environment is still not back to normal but there is hope for recovery as vaccination programs across countries and regions are gaining traction,” Hassan said. “We remain cautiously optimistic about some pick up in market activity after the summer and as we go into the next year.”