BisB decides on enhancing its provisions, decides capital increase, and announces its mid-year results with non-cash losses of BD 5.7 million
11-July-2010
BisB has taken the option of enhancing its financial position, by increasing its provisions mainly due its investment portfolio, rather than announcing profits for its mid–year results.
Khalid Abdulla Al-Bassam – Chairman of the Board of Directors announced through a press release issued from the Bank, after approval of the Board of Directors of the financial results on Thursday 8th July 2010, that the Bank has registered non-cash losses to the tune of BD 5.7 million for the first half of the current year. The losses were a result of increasing provisions on the investment mainly on the portfolio for some companies listed in Bahrain. This measure is a precautionary step against any market changes, and in line with the Bank's conservative policy in this regard.
The Chairman then proceeded to state that the Board has discussed in its meeting held on Thursday July 8th, 2010 increasing its paid-up capital as stipulated in its strategy and to address the growth requirements of its finance and investment portfolios. The Board of Directors agreed to increase the paid-up capital of the Bank by up to 75 % by issuing new shares with at its nominal share price issue of 100 Fils per share. BisB is planning to coordinate with the CBB and other concerned governmental bodies for the necessary approvals to this increase in its capital. Mr. Khalid Abdulla Al-Bassam went on to confirm the Bank’s strong financial position and its satisfactory liquidity status and reiterated that the Bank needs the new injection of cash to finance the growth requirements in its business activities.
Mr. Khalid Abdulla Al-Bassam - Chairman of the Board of Directors pointed to the role played by BisB in the development of the national economy through its various contributions in financing infrastructure projects in the Kingdom. Among them are many finances it extended to Mumtalakat’s subsidiary companies, reaffirming the Bank’s willingness to participate further in future governmental and private sector projects whenever it is found economically feasible.
The Chairman then expressed his satisfaction on applying these conservative and careful policies by the Bank and in keeping alert by monitoring all market movements and in exploiting the feasible opportunities available in the market as is planned in its strategy. The Chairman also commended the Bank’s adherence to the governance standards and in abiding by CBB regulations and decisions as far as public disclosure and transparency standards are concerned.
The Chairman also expressed his satisfaction after Moody’s formal issuing of its credit rating report on BisB, confirmed its Baa1 status on the long term and P2 on the short term with a stable outlook. Moody’s positive report confirms and affirms the Bank’s competitive strengths and it is an international recognition of the Bank’s status at the same time.
Mohammed Ebrahim Mohammed – CEO of the Bank, on his part, expressed his pleasure and satisfaction to the Board of Directors’ support and approval to take additional provisions to strengthen the Bank’s financial position. Total net provisions for the second quarter which ended on 30th June amounted to BD 6.4 million which resulted in a net loss of BD 5.7 million for the same period. The CEO then added that what contributes to our satisfaction is the fact that the Bank relies now to a large extent on Islamic Finance revenues and revenues from its core activities which represent more than 80% of its total operational revenues. The Bank revenues, also, have no component element of unearned revenue or revaluations which affirms the Bank’s conservative and rightful approach.
Mr. Mohammed Ebrahim Mohammed confirmed that the Bank continues to accomplish its goals and future plans by concentrating on the growth of its activities and core business especially in the area of retail banking services which has grown by more than 700% during the last three years. Mr. Mohammed Ebrahim Mohammed – CEO then added that total balance sheet footing has registered and increase of 6% for the first six months, current accounts reached BD 91 million i.e. an increase of BD 12 million for the same period, in addition to registering a 5% increase in customer deposits which reflects customer confidence and loyalty to the first Islamic Bank in Bahrain.
As far as the services offered by the Bank are concerned, the CEO explained that in line with the approved plan the Bank continues to present more of its products and services either through the Bank’s branches and ATMs or through its electronic portal. During last April, the Bank has started its trial operations on its new City Center branch which has gained wide acceptance and appreciation. This branch will be inaugurated in the near future, after ascertaining that all requirements for offering the best of services to our esteemed customers are in place.
Mr. Mohammed Ebrahim Mohammed - the CEO, then extended his thanks and appreciation to the Chairman and members of the Board of Directors for their guidance and constant support, and to the Revered Chairman and members of the Sharia Board for their explanations of the different Sharia banking issues, and for the supervisory bodies for their cooperation, support and constant oversight, and for our esteemed customers for selecting BisB as their bank of choice through which they will perform all their banking operations, and for all the staff of BisB for their dedication and hard work. We pray for Allah Almighty that 2010 and the coming years will turn out to be the years of accomplishments and blessings to all.