Al Salam Bank’s performance ‘robust despite challenges’

For the nine months ended September 2020, the bank reported net profit of $21mln


MANAMA: Al Salam Bank-Bahrain (ASBB) has reported a net profit of BD972,000 ($2.6 million) for the third quarter ended September 2020, compared with BD4.9m ($13m) in the same period of 2019, reflecting a decrease of 80.2 per cent.

Earnings per share for the third quarter decreased by 80pc to 0.4 fils compared with 2 fils in the same period of 2019.

For the nine months ended September 2020, the bank reported net profit of BD8m.

This represents a 54pc decrease compared with the BD17.2m net profit reported in the same period in 2019.

Earnings per share during the nine months stood at 4 fils in 2020, compared with 8 fils per share in 2019, reflecting a decrease of 50pc.

The bank’s cautious provisioning approach in response to the implications of Covid-19 resulted in the decline in net profit.

Total shareholders’ equity was down 9pc from BD319.4m as of end-2019 to BD291.5m as of end-September 2020.

This was owing 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.

Strong growth was seen in a number of areas despite the exceptional measures taken by the bank to mitigate the industry-wide negative impact of Covid-19.

The bank’s total assets recorded robust growth, reaching BD2.2 billion as of end-September 2020, up 9pc from BD2bn in December 2019.

Total operating income for the quarter stood at BD24.1m – a 7.2pc increase from BD22.5m recorded for Q3-2019.

Total operating income stood at BD74.2m for the nine-month period ended September 2020 – a 9pc increase from BD68.2m recorded for the same period last year.

The first nine months saw a reduction in cost-to-income ratio of 48.8pc, compared to 52.5pc for the same period of last year.

The financing portfolio saw a 16pc increase from BD1.07bn as of end-2019 to BD1.25bn as of end-September 2020.

Customer deposits surged by 14pc to BD1.27bn in September 2020 from BD1.11bn as of end-2019.

Capital adequacy ratio as of end-September 2020 stood at 26pc, up from 20.8pc as of end-2019.

ASBB chairman Shaikh Khalid bin Mustahil Al Mashani said, “The first nine months of 2020 have been marked by unprecedented instability and volatility for all sectors and industries across the board, and banking is no exception. However, even in this unfavourable climate, the bank has delivered a robust performance in terms of operating income and core banking activity – testament to the continued resilience to external shocks, strong fundamentals, and extraordinary ability to withstand unforeseen market challenges.”

ASBB Group chief executive Rafik Nayed said, “The team has worked tirelessly to minimise disruption, ensure continuity and respond to the fast-evolving needs of our customers during this period of global uncertainty. Thanks to their efforts, we have succeeded in increasing market share, safeguarding and diversifying our customer and funding base, and streamlining and enhancing service channels, all while reducing cost. Core banking activities have performed exceptionally well and achieved steady growth despite the industry facing one of the most challenging and unpredictable periods in living memory. Going forward, we will continue to drive down non-core banking and real estate exposures while expanding core banking in terms of asset and capital allocations in line with our three-year strategy.”

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