Bahrain's Al Salam Bank registers $18.88mln first half net profit

Earnings per share stood at 3.3 fils in H1 2020, compared with 5.7 fils per share in H1 2019

  

MANAMA: Al Salam Bank-Bahrain (ASBB) has reported a net profit of BD7.1 million in the six months ending June 30, 2020 (H1 2020), representing a 42 per cent decrease from BD12.3m reported in the first half of 2019 (H1 2019).

Earnings per share stood at 3.3 fils in H1 2020, compared with 5.7 fils per share in H1 2019.

However, despite the exceptional measures taken by the bank to address the industry-wide negative impact of Covid-19, total operating income for H1 2020 improved by 10pc to BD50.2m, up from BD45.6m in the same period of 2019.

Moreover, the bank saw an improvement in operational efficiency, as evidenced by a decrease in cost-to-income ratio from 50.3pc in H1 2019 to 48.1pc in H1 2020.

Total shareholders’ equity at the end of the first half of 2020 decreased by 10pc to BD291m, down from BD324m at the end of 2019.

The decline in equity base was mainly attributed to a Covid-19 related one-off modification loss arising from the six-month profit-free moratorium provided to financing customers, pursuant to the directives of the Central Bank of Bahrain.

The bank’s total assets also recorded strong growth to BD2.194 billion as of June 30, 2020, up from BD2.047bn in December 2019 – an increase of 7pc.

The total financing portfolio increased by 11pc to BD1.198bn, compared to BD1.083bn as of December 2019.

The bank continued to maintain healthy liquidity levels, with customer deposits increasing by 15pc to BD1.316bn in June 2020 compared to BD1.144bn as of December 2019.

Al Salam Bank-Bahrain chairman Shaikh Khalid bin Mustahail Al Mashani said, “Although the first half of 2020 was one of the most challenging and unpredictable periods in recent history, the bank has delivered a robust performance in terms of operations and steady business growth. This is indicative of Al Salam

Bank’s resilience to external shocks and strong fundamentals, as well as its extraordinary agility and strength in the face of these challenges.”

He added, “The pandemic has resulted in a global economic slowdown and an uncertain economic landscape. Government-imposed containment measures and policies have directly impacted the financial industry around the globe. Despite these challenges, which range from a six-month profit-free deferment on financing facilities to increased provisioning, the steps that we have taken, and continue to take, are designed to increase resilience and agility, and position the Bank favorably to navigate a world of even greater complexity post-Covid.”

Al Salam Bank-Bahrain Group chief executive Rafik Nayed said, “Our core banking engine performed exceptionally well during this difficult period, with customer deposits and financing portfolio growing by 15pc and 11pc respectively, closing the half year with a balance sheet size of BD2.2bn, up from BD2bn at the end of 2019.”

Mr Nayed added, “In the face of tightening liquidity earlier in the first half of this year, our teams worked tirelessly together to achieve strong results across the board. Thanks to this, and our strategic acquisition of sovereign and high quality credit exposures, the bank has achieved balanced, consistent and considerable organic growth. Going forward, the five focus areas – operational resilience, accelerated digitalisation, market share acquisition, improved quality of earnings, and proactive health, safety and CSR initiatives, are positioning the bank well for the realities of a post-Covid world.

“Fortunately, we had already begun implementing our strategy back in 2019, which focused heavily on boosting our digital capabilities. This meant we had the groundwork and the infrastructure in place to quickly adapt to a climate that called for the rapid digitisation of operations. Our existing digital infrastructure also allowed for enhanced collaboration and communication between key business and support units, between individual employees and – crucially – with our customers, despite the paradigm shift of remote working. This has stood us in good stead for responding to even the most unprecedented of shocks.”

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