MANAMA, 25 April 2007 — Arab Banking Corporation (ABC) posted $70 million net profit in the first quarter of 2007, an increase of 6 percent from $66 million recorded in the same period last year.
The company said yesterday that total income reached $138 million from $133 million in the period under review. Interest income reached $65 million or 10 higher than the $59 million as a result of increased loan and securities volumes. Non-interest income totaled $73 million against $74 million, which included $8 million from the disposal of certain fixed assets. Loan loss recoveries net of impairment provisions totaled $6 million as compared with net impairment provisions of $1 million in the period. Operating expenses increased to $63 million from $57 million, due to additional staff hired to develop the group’s growing business lines, rise in cost of living and additional costs linked to variable compensation schemes arising from higher earnings.
ABC Group’s total assets amounted to $23.2 billion from $22.4 billion from a year-ago period. Investment in securities increased to $9.2 billion from $8.6 billion amid highly liquid investment grade securities. Loans and advances increased to $8.8 billion from $8.6 billion as the lending portfolio continued to grow to meet customer demand.
Liquidity remains strong, with the liquid assets to deposits ratio still at 74 percent. Loans to deposits ratio decreased marginally to 48 percent from 49 percent. The group continues to maintain a strong capital base as evidenced by the risk asset ratio of 15.6 percent rom 17.0 percent in the periods covered.
Ghazi M. Abdul-Jawad, president & chief executive, said: “ABC’s has been able to continually improve its operating results over the past three years, clearly demonstrating the benefits that have come from our renewed focus on the Arab region and its trade flows. The growing income streams from our wholesale banking strengths in treasury, trade and project finance, and Islamic financial services complement the expansion of business activities in the region, while the development of retail banking activities in our niche markets continues to improve our earnings capabilities. ABC’s standing on the international financial markets continues to improve, as demonstrated by Fitch Ratings’ upgrade in February 2007 to BBB+.”