Bahrain Islamic Bank boosts its provisions portfolio and decides on a capital increase

18-January-2011

 

In order to maintain its financial standing and to enhance its assets, BisB continued to build its finance and investment portfolio provisions and decides on a capital increase.

In a press release published on Tuesday January 18th 2011, Mr. Khalid Abdulla Al Bassam, Chairman of the Board, announced that the Board of Directors has approved the Bank's financial results for the year ended on 31/12/2010 registering a loss amounting to BD 39.7 million, compared to net loss of BD.19.4 million for 2009 i.e. registering 4th quarter loss of BD 29.8 million, as a result of substantially providing for both finance and investment portfolios to the range of BD 38.4 million. These provisions are for some non-performing finances in the corporate and retail books, in addition to the deterioration of the prices and values of the Bank's investments in investment funds managed by some local banks and also the fall of some of the Bank's investments in some local closed and publicly listed in BSE companies, plus the provision set aside for decline in the values of the Bank's real estate portfolio.

The Chairman also stated that the Board of Directors has agreed to invite both the Ordinary and Extra Ordinary General Assemblies each for a meeting to be held on February 8th 2011 to discuss items listed in the agenda and to approve the capital increase which will be directed towards increasing the Bank's local market share and business activities, to diversify and protect Bank's assets, increasing income from core banking services, to satisfy demand on different finances, and to seize arising opportunities in the financial markets.

Mr. Mohammed Ebrahim Mohammed, CEO of the Bank, on his part, emphasized that what has been accomplished in the last five years reflects the right track for the Bank where it relied fully on income and fees from its core finances and activities which are accounting now for more than 89% of total operational income and that income is free of any revaluations or unearned profit. Total Balance Sheet footing has registered 2.5% growth and customer deposits registered a big increase of BD 78 million compared to 2009 an increase of 15% which confirms the right path followed by the Bank.

As far as the capital increase is concerned, The CEO stated that every one has an optimistic view of the future and great confidence in receiving the required amount of the capital increase up to BD 54 million. This capital increase has been regarded as a good opportunity since the issue price is kept at 100 fils which is par value of the share for one of the most prominent of Bahraini Islamic Banks; and as the major reason for the increase is to satisfy the growing demand in core banking operations.

The CEO has expounded on providing banking services for retail, companies and government, and the satisfaction expressed by the Bank's clients for the continued development in the Bank services which has culminated in the Bank receiving the Best Visual Award (among other awards received by the Bank during the year) for the Bank's web site from the Arab Academy for Web Sites, and nominated to get a prize for the best Islamic Bank in Bahrain from (IREFME).

The CEO added, during the past few years the Bank has reviewed and enhanced its entire infrastructure (people, technology, Branches/ATM network, processes, policies and procedures) and then he showed the great emphasis and care put on staffing through continuous education and training so as to prepare strong and qualified bankers who will be able to take over in the future. All this has led the Bank to incur more expenses in the last few years, but which resulted in excellent services been provided by the Bank. An accomplishment acknowledged by peers and clients which confirms the pioneering role played by the Bank in employing national staff to the range of 97% of total employees. The CEO has also highlighted the active social role played by the Bank which is regarded as an important part of the bank’s responsibility where the Bank takes continued initiative in contributing through vetted Welfare Institutions, and the sponsorship of various activities.

In conclusion the CEO presented his thanks and appreciation to the Chairman and members of the Board of Directors for their continued support to the Bank, and for the respected Sharia Board members for their clarifications of Sharia issues related to banking, and for supervisory bodies for their guidance and oversight, and for the shareholders and respected customers for choosing to get their banking deals done through the Bank and for the staff for their dedication and hard work and would pray for Allah-Almighty that 2011 and the coming years would be most successful and prosperous years for all.