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Dec 17 2008

Banque Albaraka D'Algerie reports 80% increase in net operating income

Manama, 17 December 2008: Banque Albaraka D'Algerie, a subsidiary banking unit of Albaraka Banking Group B.S.C. (ABG) , announced that it had achieved a big increase in net profits in the first nine months of 2008 which rose by 80%. In the meantime, total assets increased by 39%, finance by 53%, deposits by 32% and shareholders equity by 68%.

The financial results of the Bank for the first nine months of the year revealed that the Bank's operating income amounted to US$59.38 million compared to US$39.78 million for the same period of last year. This is an increase of 49% which reflects the growth in income-generating assets. At the same time, operating expenses dropped by 2% to reach US$14.71 million.

This, in turn, reflects the Bank's success in controlling operating costs leading to a fall in the operating expenses to operating income ratio from 38% for the first nine months of 2007 to 25% for the first nine months of 2008. As a result, net operating income increased by 80% from US$24.81 million in the first nine months of 2007 to US$44.67 million in the first nine months of 2008. After deducting taxes, provisions and other expenses, the net income increased by the same percentage of 80% to reach US$25 million in the first nine months of 2008. Consequently, annualized returns on average shareholders equity and on average assets witnessed noticeable increases to reach 30% and 3.4% respectively in the first nine months of 2008.

During the first nine months of 2008, the assets of the Bank increased by 39% to reach US$1.1 billion compared to US$791.47 million during the same period of last year. This growth in assets was the result of growth in the financing operations of Murabaha and Ijarah Muntahia Bittamleek which increased by 53% to reach US$775.62 million. The Bank was able to finance this growth by increasing the number of its branches and the range of investment products it offers, which in turn led to an increase in customer deposit accounts and unrestricted investment accounts by 32% to reach US$836.41 million as at the end of September 2008 - which financed 76% of the total assets of the Bank. The remaining assets were financed by shareholders equity which was enhanced by 68% to reach a total of US$133.44 million as at the end of September 2008.

On this occasion, Mr. Adnan Ahmed Yousif, Chairman of the Board of Directors of Banque Albaraka D'Algerie and President and Chief Executive of Albaraka Banking Group , said that "the results of Banque Albaraka D'Algerie are a good proof of the success of the business model of Albaraka Banking Group of which Banque Albaraka D'Algerie is a key member. Our business model has proved that it was able to continue achieve successes and excellence in spite of the difficult economic and financial conditions that the world, including our Arab region, is going through. We extend our thanks to the senior management and all employees of the Bank for achieving these excellent results with the continuous help that the mother Group extends to all of its subsidiaries".

Mr. Adnan Ahmed Yousif added that "the excellent performance of the Bank in the first nine months of 2008 shows the ability of the Bank in building upon the points of strength that it possesses including its range of high quality of banking products and services, strong financial resources and large network of branches to achieve more progress and further expansion in the Algerian market and benefit from the wide ranging and growing opportunities in the market".

The Chairman of the Board of Directors of Banque Albaraka D'Algerie added that Banque Albaraka D'Algerie was the only bank of the eighteen banks in Algeria that operated according to the principles of the Islamic Shari'a.

The Bank has a network of 20 branches operating throughout Algeria and it plans to increase this number to 30 in the next three years. Because of its strong foreign trade financing services, the Bank holds an important position in the market, ranking first among the private banks and maintaining a 5.6% market share.

On his Part, Mr. Mohammed Seddik Hafid, Board Member and General Manager of the Bank, said that the Bank, thanks to the financial and technical resources available to it, was able to capitalise on the strong performance of the Algerian economy which was propelled by high oil and gas prices during the major part of the first nine months of 2008. Despite of the early warnings of the financial crisis in the month of September, the Bank was able to remain unaffected by the consequences of this crisis because of the concentration of its operation in the local Algerian market and its prudent investment and financing policies.

Mr. Mohammed Seddik Hafid added that "The Bank continues to expand its branch network, install a modern ATM network and upgrade its IT systems. It will also continue to develop its consumer banking services by offering new and innovative products, including Islamic investment bonds and investment funds as well as introducing a range of consumer finance and car loan products".

-Ends-

Banque Albaraka D'Algerie is one of the Banking Units of Albaraka Banking Group . Albaraka Banking Group (ABG) is a Bahrain Joint Stock Company listed on Bahrain Stock Exchange and Nasdaq Dubai stock exchange. It is a leading international Islamic bank with Standard and Poors long and short term credit ratings of A-3 and BBB- respectively. ABG offers retail, corporate and investment banking and treasury services strictly in accordance with the principles of the Shari'a. The authorized capital of ABG is US$1.5 billion, while the total equity amounts to about US$1.60 billion. The Group has a wide geographical presence in the form of subsidiary banking Units and representative offices in twelve countries, which in turn provide their services through more than 267 branches. These banking Units are Jordan Islamic Bank/Jordan, AlBaraka Islamic Bank/Bahrain, AlBaraka Islamic Bank/Pakistan, Banque AlBaraka D'Algerie/Algeria, AlBaraka Bank Sudan/Sudan, AlBaraka Bank/South Africa, AlBaraka Bank Lebanon/Lebanon, Bank Et-Tamweel Al- Tunisi Al Saudi/Tunisia, The Egyptian Saudi Finance Bank/Egypt, AlBaraka Turk Participation Bank/Turkey, AlBaraka Bank Syria (under formation), and an ABG representative office in Indonesia.

© Press Release 2008


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