Bahrain Islamic Bank increases its provisions & incurs BD 36 million loss for the year 2012
12-February-2013
Bahrain Islamic Bank announced that it has incurred a net loss of BD36 million for the year ended on 31st December 2012 as compared to a net loss of BD 17 million for the year 2011, after increasing its provisions portfolio by BD 41 million, with last quarter share of BD 15 million as compared to a net loss of BD 21 million for the last quarter of 2011. Hence, this would be the end of a difficult phase and the Bank is looking eagerly ahead for returning back to profitability and the enhancement of shareholders' equity. It should be noted that the Bank was able to register operating profit to the tune of BD 4.9 million as compared to BD 6.6 million for last year, and a net loss of BD 15.3 million for the last quarter of the year.
In a Press Release issued by the Bank yesterday Tuesday, Mr. Khalid Abdulla Al-Bassam - Chairman announced that the Board of Directors has approved the Financial Statements for the year ended on 31/12/2012. These results have been realized during very difficult local and international market and economic challenges. He clarified that the Bank is now relying to a large extent on recurring income from its major finance and services operations in the corporate and retail banking sectors.
The Chairman then stated that the Board of Directors has also agreed to call the Ordinary and Extra Ordinary Shareholders Meetings to convene on Tuesday 19th March 2013 so as to discuss matters listed in the agenda of these two meetings.
On his part, Mr. Mohammed Ebrahim Mohammed - CEO of the Bank has stated that what has been achieved during the last few years reflects the right path followed by the Bank especially by relying totally on income and fees from core finances and activities which constitute more than 97% of total operating income of the Bank, and moreover, this income is free of any revaluations or unrealized profits, besides the continued efforts on further developing the customer base of the Bank as a result of offering excellent services and products for all its clients.
The Bank was able to achieve the anticipated results in developing a solid base in its major activities as a commercial bank i.e. financing portfolio and customer base. The Bank has achieved positive results in these areas where Islamic Finances in the retail sector has increased by 27% and customer deposits increased by 7.5% as compared to 2011. This has resulted in a steady increase in the Bank's share of the local banking market from 8% in 2011 to 9% in 2012. This should not have been achieved without investing in the basic constituents of success, i.e. investing in recruiting and preserving high caliber staff and advanced technology and improving services and the introduction of new products. As these efforts have required a lot of expenditure in the last period, the future will require minor expenditures and the Bank will continue its course in growth of all its activities and operations which will assist the Bank in improving its key performance ratios and increase its profit by keeping to the minimum its expenditure and costs.
The CEO then added that during last year the Bank has continued reviewing and reinforcing all its basic infrastructure (HR, IT and electronic services, branches network, ATMs, Policies and procedures) and highlighted the continued importance the Bank attach on its staff which is reflected by the continuous training so as to prepare the right people to support and strengthen the Bank activities and operations in the future. The Bank is taking a leading role in employing and developing local talent with 97% of the total employees are Bahrainis. The CEO then stated that the work on building six financial malls is progressing according to schedule and it is expected to inaugurate four financial malls during this year and two in 2014.
In conclusion, the CEO expressed his thanks to the Chairman and Members of the Board of Directors for their continued support, and to the respected Sharia Supervisory Board members for their fatwas and clarification of Sharia issues, and to the supervisory and regulatory authorities for their support and cooperation and oversight, and to the shareholders and respected customers for choosing BisB for conducting their banking and financial services activities, and to the Management and staff of BisB for their efforts and dedication in performing their duties, asking Allah-Almighty that 2013 and the coming years would be successful and prosperous years to all.