Al Baraka Turk Participation Bank, a subsidiary banking unit of Al Baraka Banking Group B.S.C. (ABG), announced that it had achieved a good increase of 19% in its net profit. It also increased its equity by 19%, total assets by 24%, deposits by 25 % and financing and investments by 16% in 2011.
As a result of the repercussions of the global economic crisis and sovereign debts as well political developments surrounding Turkey, year 2011 was full of economic and financial challenges in the Turkish market. However, Al Baraka Turk Participation Bank, because of its ability to deal effectively with these challenges, and its possession of extensive resources and a wide branch network, was able to capitalize upon the circumstances arising from the crisis to expand its investment and financing portfolio and at the same time strengthen its liquid assets to enable it deal with all possibilities. As a result, the financial results of the Bank showed an increase in total operating income by 25% to TRY 530.9 million in 2011. After deducting expenses, provisions and taxes, net income increased by 19% to TRY 160.5 million (US$ 96 million) in 2011.
In 2011, the assets of the Bank increased by 24% to TRY 10.5 billion (US$ 5.5 billion) compared with TRY 8.4 billion in 2010. This increase was invested to finance the growth in financing and investments which increased by 16% to TRY 7.8 billion (US$ 4.1 billion) compared to previous year. This growth was financed by increasing the Bank’s range of investment products and branch network which led to an increase of 25% in customer deposits and equity of investment account-holders to reach TRY 9.1 billion (US$ 4.8 billion) in 2011, which funded 87% of the total assets of the Bank and which in turn reflects the Bank’s strong customer deposit base. The Bank also strengthened its shareholders equity by 19% to TRY 1 billion (US$ 535.1 million) in total as at the end of 2011.
As for the results of the fourth quarter of 2011, the net income increased by 6% to reach TRY 50.7 million (US$ 28.3 million) compared to same period of the previous year as a result of 30% growth in total operating income, which reached TRY 156.5 million during the same period.
On this occasion, Chairman of the Board of Directors of Al Baraka Turk Participation Bank and President & Chief Executive of Al Baraka Banking Group Mr. Adnan Ahmed Yousif said: “Given the difficult political and economic conditions prevailed the banks environment in 2011, we are very pleased with the excellent results that the Bank achieved in 2011. Such excellent achievements were the result of the hard work of the executive management and all the employees of the Bank as well as the strong support that the parent company (ABG) extends to its subsidiary banks, which helped to consolidate the Bank’s position in the Turkish market. Turkey is one of the key markets for the Group because of the diversity and abundance of economic activities and huge promising opportunities that it offers”.
Mr. Adnan Yousif added that “with the continuing and steady growth of Al Baraka Turk Participation Bank over the past decade, the Bank has now passed the threshold of a small bank and can be said to qualify as a major player in the Turkish market”.
Mr. Adnan Yousif said “The branch network continued in 2011 its steady growth rate with the addition of 13 new branches – bringing the network up to 122 branches – and 9 more ATMs. Al Baraka Turkey continues to expand its range of products and services in order to meet customer demand and needs. Participation accounts are offered in a variety of different types, offering the customer a selection of profit rates in relation to different maturities. Having become an authorized agent and member of the Turkish private pension system, it now offers customers a variety of non-interest bearing pension funds as well as Shari’a compliant life insurance. In the credit card arena it has created a card especially for the use of Hajj and Umrah pilgrims, providing electronic access to their bank accounts whilst on Pilgrimage and has also commenced the introduction to the market of credit cards payable by installments”.
For his part, Mr. Fahrettin Yahsi, Member of the Board of Directors and General Manager of Al Baraka Turk Participation Bank said: “The Bank results benefited from the good performance of the Turkish economy, which remained strong in 2011, recording a GDP growth rate of 7.5% compared with 8.6% in 2011. Inflation was down at 5.9% compared with 8.64% the previous year. However, the continuing strong economic performance has primarily been fuelled by the low interest rate environment which has been maintained even in the teeth of threatening. In spite of intervention by the Central Bank in the foreign exchange markets to minimize the volatility of the Turkish Lira, the Lira had fallen by some 20% over the year. However, fears of contagion from the euro zone crisis and global economic slowdown have so far proved unfounded”.
Mr. Fahrettin added “Products under development during 2012 include Silver current accounts and Gold participation accounts carrying additional benefits to holders, export credit agency programs and precious metals credits and trading accounts. It also intends to initiate mobile banking, introduce a Platinum card and set up an investment fund. It will continue to expand its network, aiming to open 20 new branches a year over the next 4 years”.
Al Baraka Turk Participation Bank is one the subsidiary banking units of Al Baraka Banking Group. Al Baraka Banking Group is a Bahrain Joint Stock Company Licensed as an Islamic Wholesale Bank by Central Bank of Bahrain, listed on Bahrain Bourse and Nasdaq Dubai stock exchanges. It is a leading international Islamic bank providing its unique services to around one billion people and with Standard and Poors investment grade long term counterparty credit rating of BBB- / A-3 (Short Term). 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 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 fifteen countries, which in turn provide their services through more than 400 branches. Al Baraka is currently having a strong presence in Jordan, Tunisia, Sudan, Turkey, Bahrain, Egypt, Algeria, Pakistan, South Africa, Lebanon, Syria, Indonesia, Libya (under formation), Iraq and Saudi Arabia.