The corresponding earnings per share during the year stood at 4.3 fils in 2020, compared with 9.7 fils in 2019, reflecting a decrease of 56pc.
The bank’s prudent approach in response to the implications of Covid-19 resulted in additional provisions and impairments thereby decreasing the net profit for the year.
Total shareholders’ equity decreased by 12pc from BD319.4m in 2019 to BD280.8m as of end-December 2020.
Accumulated losses, as of end-December 2020, stood at BD5.5m, reflecting 2.4pc of the bank’s share capital.
The decline in shareholders’ equity was primarily due to modification losses stemming from the profit-free moratorium provided to financing customers in light of Covid-19, as mandated by the Central Bank of Bahrain, and a one-off transaction involving a non-controlling interest.
Total assets recorded strong growth in 2020, increasing by 11pc to BD2,261m from BD2,043m in December 2019.
The growth was accompanied with a robust improvement in asset quality during 2020 with the bank’s non-performing facilities ratio decreasing to 5.05pc, driven by effective recovery initiatives and quality asset bookings.
The bank maintained a solid capital adequacy ratio of 26.5pc in 2020, compared with 21.2pc in 2019.
Total operating income for the quarter stood at BD22.3m – a 5pc decrease from BD23.5m in Q4 2019.
On an annual basis, total operating income stood at BD96.6m for 2020 – a 5pc increase from BD91.7m recorded for 2019.
The board of directors has recommended a dividend distribution of 5pc, equivalent to one share for every 20 shares held and aggregating BD11.5m.
Commenting, chairman Shaikh Khalid bin Mustahil Al Mashani said: “Al Salam Bank has proven its resilience and agility in its response to what has been one the most challenging and unpredictable years for the global banking industry in living memory. At the very earliest stages of the pandemic, the bank developed and was quick to implement a clear, short-term strategy with a simple objective: to build resilience and ultimately exit this pandemic period in a stronger position than when we entered it. The pandemic, and the resultant period of heightened uncertainty, is ongoing, and looks set to continue for the foreseeable future. And yet we have already entered the new year with an optimised balance sheet, improved service and communication channels and enhanced offerings for our customers. Going into 2021, we remain confident of our positioning and resilience against shocks.”
Al Salam Bank-Bahrain Group chief executive Rafik Nayed said: “Technology and innovation have been at the core of Al Salam Bank’s resilience in the face of near unprecedented global disruption throughout 2020. Going forward, we will continue to build upon our successes, keeping the needs of our customers at the heart of everything we do. The future is uncertain for the global banking industry. But for Al Salam Bank, already well positioned to navigate even the most uncertain of waters, it is rich with promise and opportunity as we continue to evolve, to innovate and to grow.”
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