SICO posts $7.95mln net profit for 2020

Decline in consolidated net profit is attributed to lower performance fees for assets under management as a result of the COVID-19 pandemic

  

MANAMA: SICO’s consolidated net profit for the fourth quarter (Q4) of 2020 was BD1.2 million, a decrease of 49 per cent year-on-year from BD2.5m for the same quarter in 2019.

Earnings per share (EPS) for the quarter were 3.37 fils, compared with 6.65 fils in Q4 of 2019.

Total comprehensive income for Q4-2020 amounted to BD1.7m, a decrease of 38pc from BD2.8m recorded in Q4-2019.

The decline in consolidated net profit is attributed to lower performance fees for assets under management as a result of the Covid-19 pandemic.

Consolidated net profit for the full year 2020 was BD3m, a decrease of 51pc from BD6m recorded in 2019.

EPS for the year were 8 fils, compared with 16.32 fils in 2019.

Total comprehensive income for 2020 was BD2.9m, a decrease of 57pc from BD6.8m posted in 2019.

Total shareholders’ equity amounted to BD58.3m as of end-2020, declining by 2pc year-on-year from BD59.4m as of end-2019.

Total assets of BD181.8m as of end-2020 were up by 9pc from BD166.8m as of end-2019.

SICO’s board of directors have recommended a cash dividend of 5pc of the share capital, equivalent to 5 Bahraini fils per share.

Overall, the bank’s financial performance in 2020 was impacted by the Covid-19 pandemic-related economic shock and the extreme volatility resulting from oil prices fluctuations and their impact on the market valuation of regional securities.

Adverse market conditions took a toll on SICO’s net investment income, which recorded BD2.2m for 2020, a decrease of 48pc from BD4.3m recorded in 2019.

However, net investment income improved in the second half of the year backed by the steady recovery in capital markets.

Net fee income for 2020 amounted to BD3.6m, a 42pc year-on-year decline compared with BD6.3m recorded in 2019.

The decline is attributed to lower performance fees in 2020 due to challenging market conditions which affected the performance of assets under management in comparison with the previous year.

Brokerage and other income recorded BD3.2m in 2020, growing by 35pc from BD2.4m achieved in 2019.

The bank saw significant growth from its global and regional brokerage activities, with the division demonstrating strong resilience and an ability to broaden its client base and attract new retail and institutional clients, leveraging its multiple digital trading platforms.

Net interest income experienced growth of 3pc in 2020 as compared with the previous year. This is due to SICO’s ability to sustain business activities as well as the deployment of efficient strategies for offering collateralised lending and effective utilisation of liquid assets.

The bank’s prudent and conservative credit risk management strategy enabled it to carry out its functions without taking additional provisions.

Total assets under management (AUMs) stood at BD877.9m as of end-2020, increasing by 9pc from BD808.7m recorded as of end-2019, driven by new clients mandates and the asset management team’s strong performance as well as continued market stability and improvement across the region during the second half of the year.

Assets under custody with the bank’s wholly-owned subsidiary, SICO Funds Services Company (SFS), stood at BD3 billion as of end-2020, growing by 7pc year-on-year from BD2.8bn as of end- 2019.

SICO chairman Shaikh Abdulla bin Khalifa Al Khalifa said: “SICO demonstrated outstanding resilience in the face of a turbulent year, with the robustness of our business model and our team’s talents and capabilities proving equal to the challenge. Additionally, we have made progress on our expansion and growth strategy, having acquired a majority stake in Bank Muscat’s Saudi-based subsidiary, Muscat Capital. This should allow us to offer full-fledged services in Saudi and to further enhance our ability to meet clients’ investment needs and mark a milestone in our achievements.”

Positive

Chief executive Najla Al Shirawi said: “SICO has continuously demonstrated the strength of its operations as well as its ability to adapt to unforeseen conditions to continue delivering value to its stakeholders. In spite of the resounding impact of closures on businesses across the globe as well as market and oil price fluctuations negatively affecting our business, SICO was still able to deliver positive results and generate value for our shareholders.

“At our asset management business, our total AUMs grew by 9pc from 2019. Additionally, SICO’s signature equity funds continued to outperform their benchmarks.

“On the investment banking front, we maintained our upward trajectory, gaining several key mandates, while cementing the bank’s position as a leading provider of value-added services and innovative advisory solutions,” Ms Al Shirawi said.

“Meanwhile, the brokerage operation also continued to grow, with its fixed income business posting outstanding results during the year, reaching transaction volumes of $1.4bn. The division has retained its status as Bahrain’s leading broker for 22 consecutive years, with a total market share of 56pc for 2020. Our Abu Dhabi-based brokerage subsidiary SICO Financial Brokerage witnessed its most profitable year to date.”

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