Bahrain's Ithmaar reviews capital plans

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MANAMA: Ithmaar Holding’s board of directors is considering setting off accumulated losses against the share capital to recapitalise the firm.

Abdulellah Al Qassimi, an independent board member who chaired the annual general meeting (AGM) of shareholders yesterday, said the capital plans are being reviewed and will be announced in due course.

“In addition, the major shareholder has stated its intention to inject new capital of up to $300 million during the second half of 2019,” he said.

The firm’s shareholder equity as of end-2018 stood at $116m.

The AGM saw shareholders approve the consolidated financial statements for 2018.

“We are pleased to announce that efforts to significantly transform the group’s operations in line with the strategic decisions taken by shareholders in 2016 have paid off in 2018, with Ithmaar Holding reporting profits for the year,” said Mr Al Qassimi.

Ithmaar Holding reported a net profit of $10.06, for 2018, compared with a net loss of $72.4m in 2017, with net loss attributable to shareholders reducing from $84.7m in 2017 to $24m last year.

“The improvement in results compared to last year is, in a large part, a result of the persistent efforts over the past two years which paved the way for the group’s gradual transformation and set the stage for a return to sustainable profitability,” he added.

The board member said trading of Ithmaar Holding’s shares on Boursa Kuwait was suspended on March 14 in accordance with Article 9.8.2 of the exchange’s rules relating to companies whose accumulated losses exceed 75pc of the share capital.

He said the accumulated losses, as of end-2018, represent mainly impairment provisions resulting from non-core investments and due to FAS 30 impact.

Net income before provision for impairment and overseas taxation increased to $43.42m, a 96.8pc increase from $22.10m reported for 2017.

Operating income for 2018 increased to $259.82m, a 12.7pc increase from $230.56m reported in 2017.

“The achievements, which are made all the more significant by the challenging market conditions that continue to prevail both in our region and beyond, are only part of the ongoing success story,” said Ithmaar Holding chief executive Ahmed Abdul Rahim.

Ithmaar Holding owns two wholly-owned subsidiaries, Ithmaar Bank, an Islamic retail bank which holds the core retail banking business, and IB Capital, an investment firm, which holds investments and other non-core assets.

“Key customer-focused initiatives helped Ithmaar Bank report improved financial performance in 2018, with net profit increasing to $37.5m, a more than 127pc increase over $16.5m reported in 2017,” said Mr Abdul Rahim.

“This significant improvement testifies to the fact that the bank’s renewed focus on core retail banking business is paying off.”

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