Al Salam Bank attributable 9M net profit jumps 25% to $53.8mln

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Bahrain - Al Salam Bank, one of the pioneering Shari'a-compliant banks in Bahrain, has seen its nine-month (9M) net profit attributable to shareholders jump 25% to BD20.3 million ($53.8 million) compared to BD16.2 million in 2021.

Correspondingly, earnings per share during the nine-month period stood at 8.6 fils ($23 cents) in 2022 compared to 6.7 fils in 2021, reflecting an increase of 28%. Total operating income for the nine-month period increased by 22% to BD99.3 million compared to BD81.6 million for the same period in 2021.

As the first publications of results post the transaction with Ithmaar Holding, which included the consumer banking division of Ithmaar Bank, the Bank’s income statement included one-off items such as the Day 1 ECL charge and other acquisition related adjustments arising from the transaction.

Shareholder equity

Total shareholders’ equity decreased by 2% from BD296.3 million in December 2021 to BD291.7 million at the end of September 2022, primarily due to dividend distribution and reduction in reserves. Total assets recorded robust growth during the first 9-months in 2022, increasing by 42% to BD3.8 billion from BD2.7 billion in December 2021. Customer deposits grew by 44% from BD1.8 billion in December 2021 to BD2.6 billion as at end of September 2022.

The growth in assets and liabilities base were primarily driven by the impact of the transaction with Ithmaar Holding and the organic growth achieved during the period. During the nine-month period, financing assets increased by 45% to BD2 billion compared to BD1.4 billion in December 2021. The bank continued to maintain a strong capital adequacy ratio at 22.26% as at the end of September 2022.

Q3 results

For the third quarter, Al Salam Bank reported a net profit attributable to shareholders of BD6.8 million, compared to BD5.6 million for the same period in 2021, reflecting a 22% increase, primarily driven by growth in core banking activities. Earnings per share stood at 2.9 fils for the third quarter of 2022 compared to 2.3 fils for the same period in 2021, reflecting an increase of 26%. Total operating income for the quarter stood at BD44.1 million, a 60% increase from BD27.6 million in the third quarter of 2021.

Shaikh Khalid bin Mustahail Al Mashani, Chairman of Al Salam Bank, commented: “The bank’s robust performance in the first nine months of 2022 outperformed last year’s results for the same period and produced a substantial increase in asset base. We have pursued organic and inorganic growth initiatives, including our transaction with Ithmaar Holding, to expand our market share and firmly cement Al Salam Bank’s position as the largest Islamic financial institution in Bahrain. We are confident that we will maintain the Bank’s strong growth trajectory in 2023 and beyond.”

Group Chief Executive Officer of Al Salam Bank, Rafik Nayed, said: “Charting a new chapter of growth, our latest financial results represent our first set of consolidated results following our acquisition of select assets from Ithmaar Holding, including the consumer banking business of Ithmaar Bank. We will continue to implement Al Salam Bank’s strategy of increasing core banking activities, growing retail banking operations, and achieving sustainable growth across all metrics through organic and inorganic initiatives. As we work towards a seamless transition post our transaction with Ithmaar Holding, we are determined to deliver a superior banking proposition to our growing client base.”