MANAMA, 17 September 2006 — Ithmaar Bank, a major publicly quoted investment bank based in Bahrain, has posted its best-ever half-year performance, which has seen profits soar by 104 percent.
A continued growth in assets, revenue and net income, has resulted in a net profit of $33.2 million for the first six months of 2006. This represents more than 90 percent of the 2005 full-year profit of $37.6 million and more than double the 2005 first-half profit of $16.3 million.
As a result, the annualized return on equity amounted to 14.8 percent, while the annualized return on assets was 10.4 percent.
Commenting on the bank’s strong performance during 2006, Ithmaar Bank Chairman Khalid Abdulla-Janahi said: “The bank’s outstanding performance during this year is attributable to increased contributions from all areas of the bank’s core business as well as strong performances of its associates. The results are particularly remarkable as the bank has undergone a complete structural overhaul this year.”
Earlier in the year, Ithmaar Bank was reconstituted as a public shareholding company, now listed on the Bahrain Stock Exchange. Through a private placement and an initial public offering (IPO), the bank’s paid up capital was increased to its current $360 million.
The capital increase was aimed at supporting the bank’s new mission of becoming a major Islamic financial institution in the world.
Its current business covers four geographic segments, namely Bahrain, the rest of the Middle East, Pakistan and Europe, with all regions, particularly Bahrain and the Middle East posting enhanced profitability. The corporate management and retail lines of business turned in the best performances, followed by asset management and insurance (Takaful). The bank is also expanding its business in China and Malaysia.
An increase in all areas of business more than trebled operating profit to $19.1 million for the first half of 2006, from $5.5 million during the same period last year.
Shareholders equity amounted to $646.7 million, compared with $252.7 million at December 2005, while total assets almost doubled to $830.2 million at June-end 2006, from $442.3 million at the same time last year.
“This year is a milestone year for the bank and I’m delighted with the successes achieved so far,” said Janahi. In August 2006, Ithmaar Bank acquired from Dar Al-Maal Al-Islami (DMI) Trust, one of the world’s largest Islamic financial institutions, a 60 percent shareholding in Shamil Bank, a major commercial and investment bank based in Bahrain, also listed on the Bahrain Stock Exchange (BSE).