MANAMA, 25 August 2004 — Arab Banking Corporation (ABC), the largest Arab bank in terms of assets, announced net profits yesterday of $506 million in the first six months of 2004, up more than fivefold on the same period last year.
“The net profit for the same period last year amounted to $96 million,” said a statement by the bank, which recorded net profits of $120 million for 2003, compared with a $41 million loss in 2002.
Operating profit in the first half of this year totaled $51 million compared to $66 million in the same period last year, the Bahrain-based investment and banking group said in a statement.
Net interest income slipped to $70 million from $83 million in the first six months of 2003, mainly due to the “continuing low interest rate environment,” it said.
Loan loss provisions amounted to $6 million, compared with $14 million last year.
ABC group assets dropped to $13.9 billion, “the reduction (from $30 billion at the end of 2003) being due to the disposal of International Bank of Asia and Banco Atlantico,” it said.
ABC sold International Bank of Asia to Fubon Financial Holding and Company, of Taiwan in September 2003. It agreed to sell Banco Atlantico to Banco de Sabadell of Spain in December, with the deal completed earlier this year. Liquidity strengthened, with a liquid assets to deposits ratio at 80 percent compared with 51 percent in 2003, the bank said.
“Concurrent with the process of arranging the disposals of International Bank of Asia and Banco Atlantico earlier this year the ABC Group began to reposition its assets, enhance its development of activities within the Arab region and complete structural changes within the group to reduce expenses,” said President and Chief Executive Ghazi M. Abdul-Jawad.
“These structural changes and expense controls brought in recently are beginning to show their impact on ABC’s expense base, reducing current overheads,” he added.
ABC’s major shareholders are the Libyan central bank, the Abu Dhabi Investment Authority and the Kuwaiti Finance Ministry, which together own 70 percent of the bank. Another 25 percent of the stock is traded on the Bahrain, Kuwait and Paris stock exchanges. The remaining five percent is held by individual and institutional investors.
