Bank ABC Islamic 9M net profit rises 18.6% to $35.1mln

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Bank ABC Islamic closed its first nine months (9M) this year with a net profit of $35.1 million, 18.6% higher than the same period last year.

Net operating income before credit losses stood at $44.1 million, 37.4% higher on a year-on-year basis. The growth in income and profitability is on the back of higher profit rate environment as well as stable core customer business. The balance sheet remained healthy, maintaining strong capital ratio.

Operating expenses logged $8.4 million, 35.0% higher compared to $6.2 million for last year. The bank’s capital base remains very strong with a capital adequacy ratio of 41.5%.

Stable performance

Hammad Hassan, Managing Director of Bank ABC Islamic, said: “The year-to-date performance of the bank is promising and is based on stable performance from core client business as well as favorable higher profit rate environment. Capital markets activity picked up this year after a subdued 2022. We have been active on this front and lead managed several high profile Sukuk mandates during the year. Cash management, trade finance and financial and markets products also outperformed. Credit cost remained in check.

"We are pleased to have concluded the 9M period with overall profitability showing a healthy 18.6% growth on a year-on-year basis. We maintain a strong capital base with healthy capital ratios. The Bank continues to support ABC Group’s global Islamic finance franchise in Algeria and UK as well provides product and Shariah support to ila alburaq, ila’s Islamic product offering in Bahrain. Performance across all these businesses have been impressive.”

Meanwhile net profit for the third quarter (Q3) was $10.2 million compared to $8.9 million reported in the third quarter of last year. Net operating income before credit losses was $13.4 million compared to $9.0 million for the same period of last year.

Operating expenses

Operating expenses were $2.4 million, compared to $2.0 million for the same period of last year.

ABC Islamic Bank’s total assets stood at $2.457 billion as of September 30, 2023, compared to $2.415 billion at 2022 year-end.

Investments were at $952 million, compared to $882 million at 2022 year-end. Murabaha receivables, Ijarah and Musharaka financing were at $1.4 billion, compared to $1.45 billion at 2022 year-end. Shareholders’ equity on September 30, 2023, stood at $335 million, compared to $330 million at 2022 year-end.

The bank’s capital base remains very strong with a capital adequacy ratio of 41.5%, predominantly Tier 1, which totalled 40.4%.