It is Ithmaar’s first financial reporting as an Islamic retail bank following its successful reorganization in April with its then wholly owned subsidiary, Shamil Bank. The half-yearly financials were announced by Ithmaar Bank’s Chairman Prince Amr Mohammed Al Faisal, following the same have been reviewed and approved by the board of directors.

“On behalf of the Ithmaar Bank Board of Directors, I am pleased to report that the bank continues to report profits, despite challenging market conditions,” said Prince Amr. “The bank’s year to date results, the first to be reported under the standards issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) that govern financial reporting by Islamic retail banks, indicate that our core retail and corporate banking activities remain a stable source of recurring income,” he said.

“Ithmaar’s half year financial results show a net profit of $8.3 million, of which $4.6 million is attributable to shareholders of the bank,” said Prince Amr. “This compares to a loss of $49.6 million for the same period last year, and reflects the bank’s growing success after having overcome the challenges created by the global financial crisis,” he said.

Ithmaar Bank chief Executive and member of the board Mohammed Bucheerei said that following its transformation into an Islamic retail-focused bank, Ithmaar has focused on further strengthening its inter-bank relationships and on growing its customer accounts. Bucheerei, who was appointed chief executive officer in July, said that Ithmaar had, since its reorganization, re-established several inter-bank lines and institutional relationships that have helped diversify the Bank’s liquidity base and introduced new customer-focused products and services that have helped increase the customer base. “Ithmaar Bank’s balance sheet continues to remain strong at $5.7 billion and total shareholders’ equity at $789 million,” said Bucheerei. “Ithmaar has also continued its policy of adopting prudent impairment provisions on financings and investments,” he said.

“Ithmaar’s half year results, made all the more significant by the challenging market conditions in which we operate, reflect the success of Bank’s efforts to develop its core retail and corporate banking business,” said Bucheerei. “Total income remains strong at $108.9 million, compared to $75.7 million for the same period last year, and includes gain of $24.1 million on sale of investment to a related party. In addition to developing our corporate banking activities by establishing new institutional relationships, we have also developed our retail banking activities with unrestricted investment accounts improving significantly, by 25 percent, to $1.2 billion,” he said.

“Since our transformation into an Islamic retail focused bank, Ithmaar has also undertaken steps to exit from certain non-strategic investments which will enable the Bank to redeploy funds toward further strengthening its core retail and corporate banking business,” said Bucheerei. “This will allow us to further amplify our efforts both on expanding Ithmaar’s range of retail products and services as well as its delivery channels and on extending the Bank’s geographical reach across the GCC region by offering a wide range of corporate banking services,” he said.

“Ithmaar is, for example, currently implementing a retail banking expansion plan as part of our board-approved Business Plan,” said Bucheerei. “This expansion plan will see Ithmaar adding two new branches, as well as seven new Automated Teller Machines (ATMs) to its retail banking network,” he said.

Ithmaar had, following its transformation into an Islamic retail-focused bank, rolled out new, customer-focused products — including a first of its kind online mobile banking solution.