Al Baraka Banking Group Financial Result
The Bahrain based leading Islamic banking group, Al Baraka Banking Group B.S.C (ABG) announced that its net income increased by 10% in the first half of 2012 compared to the same period of 2011. Similarly, statement of financial positions witnessed moderate increases. Total assets increased by 3%, total financing and investments by 8%, deposits including equity of investment accountholders by 3% and total equity by 3% as at the end of June 2012 as compared with the end of December 2011.
These figures confirmed the Group’s continuation to achieve the distinguished results, as it was able to maintain the constant growth in its businesses and income in accordance with successful strategies applied to overcome the adverse political and economic developments both regionally and globally, and to further achieving the goals and business programs relating to new products and services, expansion of customer base through increasing the number of branches, as well as entering into new markets and partnerships.
The financial statements of the Group for the first half of 2012 showed that the continued expansion in business reflected positively on income, with total operating income of US$ 412 million in the first half of 2012, an increase of 17% over same period in 2011. After deducting all operating expenses, net operating income amounted US$ 192 million in first half of 2012, which represents an increase of 13% compared to the net operating income during the first half of 2011. The net income amounted to US$ 121 in first half of 2012 compared to US$ 110 million in first half of 2011, which reflects an increase of 10%. The net income attributable to the equity holders of the parent amounted US$ 70.8 million in the first half of 2012 compared to US$ 64.4 million in the first half of 2011, which reflects an increase of 10%. 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$ 17.6 billion as at the end of June 2012, an increase of 3% over the comparative figure as at the end of 2011. Financing and investments amounted to US$ 12.7 billion as at the end of June 2012 compared to US$ 11.8 billion at the end of December 2011, an increase of 8%. Customer deposit including equity of investment account-holders have witnessed an increase of 3% from US$ 14.7 billion at the end of December 2011 to US$ 15.1 billion at the end of June 2012, which indicates continued customer confidence and loyalty to the Group. Total equity enhanced by 3% to reach US$ 1.84 billion at the end of June 2012.
With regard to the results of the second quarter of the year 2012 compared with the same period last year, total operating income increased by 13% to reach US$ 206 million, while net income was US$ 63 million, an increase of 12% from what it was during the same period last year, which amounted to US$ 57 million. Net income attributable to the equity holders of the parent amounted 38 million for the second quarter of 2012 compared to US$ 34 million for the same period last year, which represent an increase of 13%.
With regard to the results of the second quarter of the year 2012 compared with the results of the first quarter of the same year, total operating income remained at the same level, while net income increased by 10% to reach US$ 63 million for the second quarter of 2012 compared with US$ 57 million for the first quarter of 2012.
Commenting on these results, Sheikh Saleh Abdullah Kamel, Chairman of Al Baraka Banking Group, said “The second quarter of 2012 witnessed the spread of the adverse effects of Euro Zone’s crisis into the world economy as a result of the decline in its imports of products and raw materials including oil. This created new challenges for our countries, which were added to the political and economic repercussions of events witnessed by a number of them during the past period. These had negative implications on the environment of the banking sector. It is natural that the operations of banks would have affected by these developments, but we nevertheless, thanks to God, continued in ABG to achieve good results, which reflects the Group success in following the right Islamic banking model as well as precautionary strategies that enabled it to deal wisely with these developments and to continue expanding its business and income”.
For his part, Mr. Abdulla Ammar Al Saudi, Deputy Chairman of ABG, said that “The economic and financial developments during the past few months of this year were very difficult indeed and they further created adverse repercussions resulted from the world crisis, which was started during the third quarter of 2008. Because of this crisis, financial institutions across the world were forced to adopt conservative and cautious business strategies. In light of these developments and conditions, we consider the financial results achieved by the Group in first half of 2012 as excellent by all standards and they reflect the success of the business strategies that we at the Board of Directors of the Group have put in place based on our points of strength, the opportunities generated in the markets in which we operate and our strong commitment to adhering to the highest professional values, principles and standards that we embodied in all the programs, services and products that the Group offers”.
On his part, Mr. Adnan Ahmed Yousif, President and Chief Executive of Al Baraka Banking Group, said that “the financial results achieved by the Group in first half of 2012 can be considered as excellent if we take into account the difficult economic and financial conditions that prevailed in the region and the world as a whole. Such results were not possible to achieve were it not for the flexible and ambitious strategies of the group, which were based on a number of objectives, programs and initiatives that aimed to achieve strong growth in earnings and operations taking advantage of the Group’s depth of geographical presence, thorough knowledge of the Islamic markets and banking products, financial strength and a wide branch network which is the largest amongst Islamic banking institutions. These strategies, at the same time, dealt with the repercussions of the global crisis and political events with prudence and realism”.
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, Egypt, Jordan and South Africa had resumed expansion by opening new branches in the first half of the year and this have direct positive impact on growing their deposit base and financing portfolios. Total branches of our units in 14 countries increased from 399 branches as at the end of December 2011 to 414 branches as at the end of June 2012. We expect that total branches of the Group’s units will exceed 500 branches during the coming three years”.
With regard to geographical expansion and entering new markets, Mr. Adnan Ahmed Yousif said that “we have opened our representative office in Libya, where we prepare for expansion in the Libyan market and provide various banking services to clients from individuals, companies and government agencies”.
Mr. Adnan said, “The month of June of this year witnessed Al Baraka Banking Group holding its 13th strategy meeting in Lebanon with the participation of chief executives and general managers of the units of the Group from all around the world. The meeting addressed important topics notably the business strategies of the Group’s units during the next phase and coordination among them, in addition to aspects related to confirm and consolidate the leading role of the Group’s units in promoting the thoughts and philosophy of Islamic banking. “
Mr. Adnan said “we are pleased that the announcement of this statement is released after we successfully organized Al Baraka Annual Symposium on Islamic economy at its thirty-third session in Jeddah on 6-7th of Ramadan 1433H corresponding to 25-26th July 2012. The Symposium discussed a number of important topics such as management of fluctuations in exchange rates and dealing during the banking time limits, commissions and fees of letters of guarantee and documentary credits, credit cards and profit free finance (Al Qard Al-Hassan), in addition to endowment of money, shares and stocks and issues on Zakat, with the broad participation of the owners of virtue, leading scholars and experts in Islamic economy as well as more than seven hundred officials of the central banks of several Islamic countries, the chief executives and general managers of banks and Islamic financial institutions and those interested in its issues inside and outside the Kingdom of Saudi Arabia. The Symposium also witnessed the launch of Al Baraka Prize in Islamic Economics, which was awarded to one of the scholars who have distinguished contributions in this field”.
The President &Chief Executive added “On the level of regional and international achievements made by the Group and its units, four banking units of the Group received the “Best Islamic Bank” Award of 2012, as part of the annual awards from the Global Finance Magazine, which is specialized in banking and finance awards to banks and financial institutions. These banking units are Al Baraka Bank Algeria as the Best Islamic Bank in Algeria, Jordan Islamic Bank as the Best Islamic Bank in Jordan for the fourth consecutive year and the Best Islamic Bank for Retail Services in the World for the third consecutive year, Al Baraka Bank Limited as the Best Islamic Bank in South Africa and Al Baraka Islamic Bank Bahrain as the Best Islamic Bank in Bahrain.
“The “FT The Banker” magazine listed Al Baraka Banking Group in the list of the top 500 bank in the world in terms of brand value for the first time. The magazine published an annual list of major banks in the world with an evaluation of its brand in comparison with the market value of these banks at the end of the year. The methodology for evaluation of the brand (developed by a company called Brand Finance) has been recognized by the courts and tax authorities, and it is based on the financial statements of the brand divided into different levels such as product lines and geographic regions, etc., as well as the assessment of the strength and the risks of brand compared with competitors, on a scale ranging from “AAA” to “D”. Al Baraka Banking Group has been rated as “A”.
“Furthermore, Al Baraka Banking Group was entered into an agreement with the World Bank whereby they will launch joint programs in the framework of the new “Islamic finance initiatives”. These initiatives aim to promote sustainable development of Islamic economies and Finance, through the design and implementation of activities in a number of strategic areas”.
The President & Chief Executive of the Group added that “In accordance with our new strategy, we have many plans and initiatives that we intend to implement during 2012. These will 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 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 Groupis 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 Poor’s 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.
Performance indicators:
30 June 2012 compared to 31 December 2011 Growth
Growth
Total assets
3%
Total financing and investments
8%
Total customer deposits
3%
1st half of 2012 compared to 1st half of 2011
Growth
Total operating income
17%
Net operating income
13%
Net income
10%
2nd quarter of 2012 compared to 2nd quarter of 2011
Growth
Total operating income
13%
Net operating income
9%
Net income
12%
