DAMMAM, 8 February 2007 — Bahrain-based Arab Banking Corporation (ABC) recorded $202 million net profits in 2006, a 57 percent increase from the previous year.

The company’s total income grew 38 percent to $484 million compared to $352 million over the same period in 2005. Net interest income rose 29 percent in 2006 to reach $249 million compared to $193 million in 2005. Non-interest income increased 48 percent to $235 million against $159 million in 2005.

The cost-income ratio improved to 54 percent compared to 60 percent in 2005. The increase in revenues offset the operating expenses of $262 million in 2006 from $211 million a year ago.

The increased staff costs could be attributed mainly to hiring several product and specialist hands and to the costs of additional incentive plans, combined with the cost of streamlining operation carried out to improve operational efficiency. On the other hand, office, equipment and other operating expenses were kept well under control.

Total assets stood at $22.4 billion in 2006 against $17.6 billion in 2005. Investments in securities in 2006 increased to $8.6 billion from $6.6 billion in 2005, mainly in highly liquid AAA-rated securities.

Loans and advances increased to $8.6 billion from $6.8 billion in the previous year. Liquidity remained extremely strong, with the ratio between liquid assets and deposits at 74 percent compared to 75 percent in 2005. The loan-deposit ratio also remained at a low level of 49 percent compared to 51 percent in 2005. ABC continues to maintain a strong capital base, as evidenced by the risk asset ratio of 17 percent in the year against 21 percent in 2005, calculated in accordance with the requirements of the Central Bank of Bahrain.

During 2006, the group continued to develop its network, opening a representative office in Beirut early in the year.

The retail-banking network was also extended with new branches opened by its subsidiaries in Egypt, Jordan, and Algeria.

Commenting on ABC’s performance in the year, Ghazi Abdul Jawad, president and CEO, said “we have again repeated our success focusing our core banking services on the Arab market while continuing to grow and diversify our income sources.”