Ithmaar Holding and its wholly-owned subsidiary,Ithmaar Bank, report 2018 financial results

• Ithmaar Holding’s wholly-owned subsidiary, IB Capital, acquired an additional stake in Solidarity Group Holding, and becomes a subsidiary of IB Capital
• As part of its Digital Strategy, Ithmaar Bank completed a major upgrade during 2018 to its IT infrastructure and systems

MANAMA, BAHRAIN: Ithmaar Holding B.S.C., a Bahrain-based financial institution, and its wholly-owned subsidiary, Ithmaar Bank B.S.C. (closed), a Bahrain-based Islamic retail bank, both reported profits as they each announced their financial results for 2018.

The announcement by the Ithmaar Holding Chairman His Royal Highness Prince Amr Al Faisal, who is also the Ithmaar Bank Chairman, follows the review and approval of both Board of Directors of the consolidated financial results for the year ended 31 December 2018.

Ithmaar Holding reported a net profit of US$10.06 million for the year ended 31 December 2018, as compared to a net loss of US$72.40 million for 2017. This included a net loss attributable to equity holders for the year ended 31 December 2018 of US$23.98 million, as compared to the US$84.71 million net loss reported for the same period in 2017. EPS for the year has improved to negative US Cents 0.82 compared from negative US Cents 2.91 for the same period in 2017.

The results included a net loss of US$1.28 million for the three-month period ended 31 December 2018, as compared to a net loss of US$56.2 million for 2017. Net loss attributable to equity holders for the three-month period ended 31 December 2018 was US$26.71 million, a decrease of 53.7 percent as compared to a net loss of US$57.67 million reported for the same period in 2017. EPS for the three-month period ended 31 December 2018 decreased by US Cents 0.92 compared to negative US Cents 1.98 for the same period in 2017.

 Also in December 2018, Ithmaar Holding’s other wholly-owned subsidiary, IB Capital, acquired,  an additional stake in Solidarity Group Holding, one of the largest Takaful Group companies in Bahrain. As a result, Solidarity Group Holding became a subsidiary of IB Capital. During December 2018, Dilmunia Development Fund I L.P, a fund which is managed by Ithmaar’s wholly-owned subsidiary, Ithmaar Bank, became subsidiary of Ithmaar Bank after the Bank’s shareholding in the company increased to more than 50 percent.

“On behalf of the Ithmaar Holding Board of Directors, I am pleased to announce that, despite increasingly challenging market conditions, the Group is continuing its planned transformation in 2018 and concluded the year with remarkable achievements,” said HRH Prince Amr. “These included improved financial performance, as well as the realisation of key growth initiatives,” he said.

“The 2018 results show that net income before provision for impairment and overseas taxation for the year ended 31 December 2018 increased to US$43.42 million, a 96.8 percent increase from the US$22.10 million reported for the same period last year,” said HRH Prince Amr. This was mainly due to higher share of profit after tax from associates resulting from reclassification from held-for-sale to associate during the period,” he said.

“As a result, our operating income for the year ended 31 December 2018 increased to US$259.82 million, a 12.7 percent increase from the US$230.56 million reported for 2017. Operating income for the three-month period ended 31 December 2018 was US$48.34 million, a 2.3 percent decrease from the US$49.48 million reported for the same period in 2017,” said HRH Prince Amr.

“Ithmaar’s balance sheet decreased marginally by 1.4% with total assets at US$8.49 billion as at 31 December 2018, compared to US$8.61 billion as at 31 December 2017,” said HRH Prince Amr. Total owners’ equity stood at US$116.36 million as at 31 December 2018, a 67.3 percent decrease compared to US$355.33 million as 31 December 2017, mainly due to the Accounting standard, FAS 30 impact of previous year recognized in equity and the foreign exchange impact of devaluation of Pak rupee during the year recognized in equity,” he said.

“On behalf of both Boards of Directors, I take this opportunity to express our sincere thanks and appreciation to our shareholders for their confidence, and to the relevant regulators and other authorities for their guidance and support,” said HRH Prince Amr. “In particular, we are grateful to the Central Bank of Bahrain, to the Bahrain Ministry of Industry, Commerce and Tourism, the Bahrain Bourse, Boursa Kuwait and the Dubai Financial Market for their continuous guidance and support,” he said.

“I am pleased to inform you that as part of its Digital Strategy, Ithmaar Bank completed a major upgrade during 2018 to its IT infrastructure and systems. The upgrade, which was implemented to help support business growth, improve operational efficiency, improve internal controls and enhance customer experience, included a major project of upgrading the Bank’s core banking system and implementation of new eBanking system. The new system provides a strong foundation to support growth, allowing for the flexibility of quickly launching new products and services with focus on customer centricity,” said HRH Prince Amr.

Ithmaar Holding Chief Executive Officer, Ahmed Abdul Rahim, who is also the Ithmaar Bank Chief Executive Officer, said that performance of both institutions against the challenging market conditions of 2018 further reconfirm that sustained efforts to turn the Group around are indeed paying off.

“Ithmaar Bank’s financial results show a net profit of BD14.14 million for the year ended 31 December 2018, an increase of 126.7 percent compared to the net profit of BD6.24 million reported in 2017,” said Abdul Rahim. “Net profit attributable to equity holders for the year ended 31 December 2018 was BD1.41 million, a decrease of 10.9 percent compared to the net profit of BD1.58 million reported in 2017,” he said.

“The results included a net profit of BD9.38 million of the three-month period ended 31 December 2018, compared to a net loss of BD0.44 million reported in 2017,” said Abdul Rahim.  “Net loss attributable to equity holders for the three-month period ended remains unchanged at $0.15 million compared to same period previous year,” he said.

“Net income before provision for impairment and overseas taxation for the year ended 31 December 2018 was BD13.70 million, a 28 percent decrease compared to the BD19.03 million reported for 2017,” said Abdul Rahim. “Total income remained stable in 2018, with the Bank reporting BD151.7 million for the year ended 31 December 2018,” he said.

“Ithmaar Bank’s balance sheet decreased marginally by 3.5% with total assets at BD3.13 billion as at 31 December 2018, compared to BD3.24 billion as at 31 December 2017,” said Abdul Rahim. “Meanwhile, due to market conditions, the equity of unrestricted investment account holders stood at BD1 billion as at 31 December 2018, a decrease of 6.6% as compared to BD1.06 billion as at 31 December 2017. Total owners’ equity stood at BD85.39 million as at 31 December 2018, a 44.8 percent decrease compared to BD154.60 million as 31 December 2017, mainly due to the Accounting standard, FAS 30 impact of previous year recognized in equity and the foreign exchange impact of devaluation of Pak rupee during the year recognized in equity,” he said.

“I am also delighted to inform you that Ithmaar Bank’s retail banking subsidiary in Pakistan, Faysal Bank Limited, has maintained growth momentum and the Bank’s footprint now extends to 455 branches in more than 100 cities across Pakistan, after having added 50 branches during 2018. The Bank aims to have expanded its retail banking network by 100 during 2019 to reach 555 branches by the end of 2019,” he said.

Early in 2018, the Bank launched the Ithmaar eQ app, which is a smartphone electronic queuing app designed to significantly reduce and potentially even eliminate customer waiting time altogether. The Ithmaar eQ app allows customers to directly book appointments or issue virtual eTickets for the nearest or most convenient branch, timings and directions, and notifies customers when their turn approaches. The app also provides significant MIS on customer behaviour.  Ithmaar Bank operates one of the largest retail banking networks in Bahrain with 16 branches and 45 ATMs in strategic locations around the Kingdom.

Later in the year, Ithmaar Bank announced plans to launch the region’s first biometric payment network. The Bahrain-created solution by Eazy Financial Services will provide consumers with a safer, more convenient and more secure way to bank, and will bring a revolutionary improvement in customers’ experience with banks. When implemented, Ithmaar Bank customers will no longer be required to use their bank cards at Ithmaar ATMs. Instead, they will simply be able to use their fingerprint along with their PIN to process financial transactions. This provides a simpler, more secure way to process financial transactions than ever before.

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About Ithmaar Holding:

Ithmaar Holding B.S.C. (“Ithmaar Holding or Ithmaar”) is licensed as an investment firm and regulated by the Central Bank of Bahrain (CBB) and is listed on the Bahrain Bourse, Boursa Kuwait and Dubai Financial Market. Ithmaar Holding owns two wholly-owned subsidiaries Ithmaar Bank B.S.C (closed) (Ithmaar Bank), an Islamic retail bank subsidiary which holds the core retail banking business, and IB Capital B.S.C. (closed) (IB Capital), an investment firm subsidiary, which holds investments and other non-core assets. The two subsidiaries are licensed and regulated by the CBB.  

Ithmaar Bank provides a diverse range of Sharia-compliant products and services that cater to the financing and investment needs of individuals and institutions. Ithmaar also maintains a presence in overseas markets through its subsidiary, Faysal Bank Limited (Pakistan) and locally through Dilmunia Development Fund I L.P.

IB Capital maintains a presence in regional and overseas markets through its investments including in associated companies. These include Bahrain-based BBK, Ithmaar Development Company Limited, Solidarity (an Islamic insurance company), Naseej and Citic International Asset Management (Hong Kong) and Ithraa Capital (Saudi Arabia).

© Press Release 2019