MANAMA: BBK has reported a net profit of BD13 million for the fourth quarter of 2020, a decrease of 34.7 per cent, when compared with BD19.9m during the fourth quarter of 2019.
The basic and diluted earnings per share were 10 fils compared with 16 fils during the corresponding period of 2019.
Total comprehensive income during the quarter of 2020 stood at BD56.6m compared with BD44.2m last year, with an increase of 28pc.
The increase is attributable to the increase in valuation of investment securities during the quarter as financial markets continued to recover from the drop experienced in the first half of 2020.
Net interest income dropped by 12pc to BD20.5m (BD23.3m in the corresponding period of last year), mainly due to interest rate cuts during early 2020.
Net fees and commission income dropped by 31.9pc from BD9.1m during the fourth quarter of 2019 to BD6.2m achieved during the fourth quarter of 2020, mainly due to the impact of the concessionary measures taken in response to Covid-19 to support the domestic business community, as well as new regulatory caps on loan fees that came into effect around mid-2020.
Moreover, the bank’s net share of profit from associated companies and joint ventures decreased from BD0.4m to a loss of BD2.3m, as a result of the adverse impact of Covid-19.
During the year, the bank took measures which helped to effectively decrease operating costs by 5.6pc to BD15.1m from BD16m level reported in the corresponding period of 2019.
For the full year ended December 2020, the bank achieved a net profit of BD52m compared with BD75.4m in the year 2019, a decrease of 31pc.
The basic and diluted earnings per share reached 39 fils compared with 56 fils for the previous year.
Total comprehensive income for 2020 amounted to BD28.9m compared with BD109.3m in 2019, representing a decrease of 73.6pc, driven by the decrease in valuation of investment securities due to Covid-19 impact on financial markets and lower net profit.
The deep cuts of global interest rates by central banks around the world resulted in a drop in net interest income from BD107.3m to BD80.8m, a decrease of 24.7pc.
Furthermore, net fees and commission income dropped from BD26.6m to BD19.6m, a drop of 26.3pc, mainly due to the impact of concessionary measures taken in response to Covid-19 and due to the application of the new regulations on capping fees and charges.
The bank’s share of profit from associated companies and joint ventures decreased from BD6.8m during 2019 to a loss of BD0.1m during 2020.
Operating costs registered a decrease of 4pc to BD60.7m compared with BD63.2m in 2019.
Continuous investment in boosting management of credit risk, active management of distressed exposures and step-up in remedial efforts resulted in a significant reduction in net provision charges from BD18.9m during 2019 to BD5.6m during 2020, a decrease of 70.4pc.
Total shareholders’ equity (excluding non-controlling interests) as of end-2020 stood at BD511.8m compared with BD543.9m as of end-2019.
The decrease of 5.9pc is mainly related to negative valuation of investment securities due to market volatility, dividend payment during the year, and the impact of concessionary measures taken in response to Covid-19 pandemic to support Bahraini citizens and companies.
Total assets stood at BD3,760.4m at end-2020 compared to BD3,865m reported at end-2019, registering a decrease of 2.7pc.
BBK chairman Murad Ali Murad
The investment securities portfolio registered a healthy increase of 9.4pc to BD957.3m compared with BD875m as of end-2019. Cash and balances at central banks registered a decrease of 31.9pc from BD376.4m as of end-2019 to BD256.5m as of end-2020.
Net loans and advances decreased by 6.9pc to BD1,555.8m (2019: BD1,670.9m). Customer deposits portfolio maintained its levels of around BD2,167.4m (2019: BD2,169.5m).
The loans to customer deposits ratio remains at a comfortable level of 71.8pc (2019: 77pc).
Based on the results, the board has recommended paying annual cash dividends of 20 fils per share and stock dividends of 10pc per share equivalent to 1 share for every 10 shares.
Commenting, the bank’s board said, “The impact of the global pandemic is reflected in BBK’s financial results, which we view as satisfactory given market conditions. Despite all the challenges and the drop in profitability across the banking sector, there were positive outcomes to the pandemic.
“The crisis has led the bank to accelerate the implementation of its 2019-21 digitisation strategy, by fast-tracking several technology projects to 2020, rather than 2021-2022, including the development and launch of BBKPlus mobile onboarding application.
“Other strategic initiatives during 2020 included the signing of a memorandum of understanding for BBK’s potential acquisition of specific assets of Ithmaar Holding. The acquisition is subject to shareholder and regulatory approvals and completion of due diligence by both parties.”
Dr Saif
BBK’s Group chief executive Dr Abdulrahman Saif said, “Despite the unprecedented challenges of 2020, we continued to deliver value to our customers and shareholders, support and develop our people, and enrich the societies in which we operate.
“A major accomplishment in 2020 has been our digitalisation strategy, by which the pandemic has helped in accelerating the delivery of our products to meet our customers’ demands for digital services. Our new digital branch in City Centre, featuring a range of self-service technologies, has received excellent feedback and we plan to open two more in 2021 to serve our clients,” Dr Saif said.
“Other digital achievements include the launch of BBK BanKey, a platform offering various solutions for business and institutional clients, and the launch of our BBKPlus mobile onboarding app in addition to BBK mobile app that offers open banking services.
“All these achievements were made while extending support to our corporate and retail customers to enable them to weather the impact of the pandemic. The support included loan repayment deferrals, interest waivers, discounted fees, and others including the support to individuals and business entities most affected by the pandemic.”
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