Net Income of Al Baraka Banking Group Increased by 16% to US$140 Million in the First Half of 2013

The Bahrain based leading Islamic banking group, Al Baraka Banking Group B.S.C. (ABG) announced that its net income increased by 16% in the first half of 2013 compared to the same period of 2012 to reach US$ 140 million. Similarly, statement of financial positions witnessed moderate increases. Total assets increased by 2%, total financing and investments by 3% and deposits including equity of investment accountholders by 2% as at the end of June  2013 as compared with the end of December 2012. These figures confirmed the Group’s continuation to achieve the distinguished results in accordance with successful strategies business programs applied relating to new products and services and expansion of customer base through increasing the number of branches.

Commenting on these results, Shaikh Saleh Abdulla Kamel, Chairman of Al Baraka Banking Group, said “the excellent financial results achieved by Al Baraka Banking Group during the first half of 2013  were a true reflection of the balanced and ambitious strategies which were based on the substantial and varied resources possessed by the group. With such resources, ABG was able to implement its strategies on the ground by implementing programs and policies that took into account the precautionary and prudent measures necessitated by the current regional and global economic and financial conditions on one hand, and the need to continue expand our markets and provide innovative Islamic products and services to customers on the other. And as such, the Group has succeeded in meeting its Shari’a and moral obligations towards developing the communities in which it operates, and at the same time maximize the value to its shareholders, owners, investors and depositors”.

Commenting on the Group’s financial results, Mr.  Abdulla Ammar Al Saudi, Vice Chairman of ABG stressed that “the group, by successfully weathering an extremely difficult period of fluctuated political, economic and financial conditions and achieving excellent financial results, was once again able to demonstrate the depth of its expertise and the high competence of its executive management team as well as the soundness of its financial resources and marketing capabilities. Therefore, we owe it to them, to extend our thanks and appreciation to the executive management at head office and the executive management teams at the subsidiary banks for the great efforts they exerted in the consolidation of their strategies and resources and capitalizing upon the growing opportunities in their markets, especially that they have a long experience in such markets that enabled them to participate effectively in serving the community and their individual and corporate customers”.

On his part, Mr. Adnan Ahmed Yousif, Board Member and President and Chief Executive of Al Baraka Banking Group, said that “the financial results achieved by the Group during the first half of 2013 can be considered as excellent by all standards if we take into account the difficult economic and financial conditions that prevailed in the region and the world as a whole. Such results were not possible to achieve were it not for the flexible and ambitious strategies of the group, which were based on a number of objectives, programs and initiatives that aimed to achieve strong growth in earnings and operations. These strategies, at the same time, dealt with the repercussions of the global crisis with prudence and realism. We also note with satisfaction that, in spite of moderate growth in the size of assets, the rate of profit growth was much larger, which is a clear indication of improved productivity of the Group’s operating assets. “

Mr. Adnan Yousif added that “the first half of 2013 witnessed many outstanding achievements and initiatives that translated these strategies to real successes on the ground in reaffirmation of our determination to continue with our expansion and modernization plans.  This once more proves the ability of Al Baraka Banking Group to overcome the effects of such adverse developments and achieve good positive results‌.

With regard to the Group’s plans to expand its branch network, the President & Chief Executive said that “the subsidiary units of the Group in Turkey and Egypt continued opening new branches, with total branches reaching 427 branches at present, and we expect to add 14 new branches this year”.

“Al Baraka Bank Turkey succeeded in obtaining joint Murabaha financing facilities worth US$ 250 million, which was structured as Sharia-compliant multi-currencies Murabaha financing.  The facilities will be used in support of financing activities of Al Baraka Turkey. With access to these facilities, Al Baraka Bank Turkey seeks to strengthen and diversify its funding base and to expand its customer base”.

“In terms of the development of the operating environment of the Group and its banking units, Al Baraka Bank Pakistan has recently celebrated the opening of its headquarters in the heart of the Pakistani capital, Karachi, reflecting the Group’s confidence in the country’s recovery from the current crisis, and to generate huge business opportunities for Islamic banks”.

“We also continued during the first half of 2013 modernizing the institutional, human and technical infrastructure of the Group through developing the regulations, applications and practices of corporate governance, risk management social responsibility, governance, compliance, AML, training, risk management regulations and FATCA compliance regulations in according with latest international standards”.

Mr. Adnan said, “The month of June of this year witnessed Al Baraka Banking Group  holding its 15^th strategy meeting in Turkey with the participation of chief executives and general managers of the units of the Group from all around the world. The meeting addressed important topics notably the business strategies of the Group’s units during the next phase and coordination among them, in addition to evaluation of impacts of international economic developments on the Group’s businesses and drawing the guidelines for the Group’s activities, annual business plans and strategies during the next phase based on that evaluation”.

Mr. Adnan said “we are pleased that the announcement of this statement is released after we successfully organized Al Baraka Annual Symposium on Islamic economy at its 34th session in Jeddah on 9-10th Ramadan 1434H. The Symposium allocated its sessions to discuss methods of calculating Zakat of equity and debt financing. The Symposium discussed also Fiqh and Islamic doctrinal researches submitted by Scholars specialized in Islamic banking and finance, and covered issues related to investment by agency, Sukuk; and Fiqh issues of debt and participation contracts; in addition to two research papers in the Zakat and provisions of dealing in gold and its recent applications. A number of scholars and economists commented on these researches in open sessions attended by about a thousand interested people from various Islamic countries. A number of the owners of virtue, leading scholars and experts in Islamic economy as well as officials of the central banks of several Islamic countries, the chief executives and general managers of banks and Islamic financial institutions and those interested in its issues inside and outside the Kingdom of Saudi Arabia were participated in the Symposium”.

The financial statements of the Group for the first half of 2013 showed that the continued improvements of operational and business efficiency reflected positively on income, with total operating income of US$ 472 million in the first half of 2013, an increase of 15% over same period in 2012. After deducting all operating expenses, net operating income amounted US$ 227 million in first half of 2013, which represents an increase of 18% compared to the net operating income during the first half of 2012. The net income amounted to US$ 140 in first half of 2013 compared to US$ 121 million in first half of 2012, which reflects an increase of 16%. Net income attribuable to the equity holders of the parent during the first half of the year reached US$ 79 million compared to US$ 71 million during the same period last year, which represent an increase of 12%.

The total assets of the Group amounted to US$ 19.5 billion as at the end of June 2013, an increase of 2% over the comparative figure as at the end of 2012. Financing and investments amounted to US$ 14.7 billion as at the end of June 2013 compared to US$ 14.3 billion at the end of December 2012, an increase of 3%. Customer deposit including equity of investment account-holders have witnessed an increase of 2% from US$ 16.4 billion at the end of December 2012 to US$ 16.8 billion at the end of June 2013, which indicates continued customer confidence and loyalty to the Group. Total equity reached US$ 1.9 billion at the end of June 2013.

With regard to the results of the second quarter of the year 2013 compared with the same period last year, total operating income increased by 16% to reach US$ 239 million, while net income was US$ 74 million, an increase of 17% from what it was during the same period last year, which amounted to US$ 63 million. Net income attribuable to the equity holders of the parent during the second quarter of the year reached US$ 42 million compared to US$ 38 million during the same period last year, which represent an increase of 11%.

With regard to the results of the second quarter of the year 2013 compared with the results of the first quarter of the same year, total operating income reached US$ 239 million, an increase of 3% compared to the first quarter of 2013, while net income increased by 13% to reach US$ 74 million for the second quarter of 2013 compared with US$ 66 million for the first quarter of 2013.

The President & Chief Executive of ABG concluded his statement by praising the tireless efforts of the executive management at Group Head Office, the executive management teams of the banking units of Al Baraka Banking Group and related parties that played an instrumental role in achieving these excellent results for the Group.

The President & Chief Executive of the Group added that “We will continue our efforts during the remaining period of 2013 to implement the planned initiatives, including launching new innovative products and services in the markets as well as enhancing the standing of ABG in the international markets.  All of these plans will be implemented, God willing, successfully considering that we are the only Islamic banking group that has such diversity of geographical presence and excellent knowledge of the markets”.

On this occasion, Sheikh Saleh Abdulla Kamel, Chairman of Al Baraka Banking Group, Mr. Abdulla Ammar Al Saudi, Vice Chairman, Mr. Abdulla Saleh Kamel, Vice Chairman, and Mr. Adnan Ahmed Yousif, ABG President & Chief Executive and all Members of the Board of Directors of ABG expressed their sincere thanks to the Ministry of Industry and Commerce, Central Bank of Bahrain, Bahrain Bourse and Nasdaq Dubai for the cooperation and assistance they extended to the Group since it was established.  They also extended their thanks to all the Central Banks in the countries in which the Group banks operate and to all investors and customers for their continued support.  They also thanked all the employees of the Group for their loyalty, hard work and dedication which stand behind the successes and achievements of the Group.

It is worth mentioning that Al Baraka Banking Group is a Bahrain Joint Stock Company Licensed as an Islamic Wholesale Bank by Central Bank of Bahrain, listed on Bahrain Bourse and Nasdaq Dubai stock exchanges. It is a leading international Islamic bank providing its unique services to around one billion people and with Standard and Poors investment grade long term counterparty credit rating of BBB- / A-3 (Short Term). Al Baraka offers retail, corporate, treasury and investment banking services, strictly in accordance with the principles of the Islamic Shari’a. The authorized capital of Al Baraka is US$1.5 billion, while total equity amounts to about US$ 1.9 billion.

The Group has a wide geographical presence in the form of subsidiary banking Units and representative offices in fifteen countries, which in turn provide their services through more than 427 branches. Al Baraka is currently having a strong presence   in  Jordan, Tunisia, Sudan, Turkey, Bahrain, Egypt, Algeria, Pakistan, South Africa, Lebanon, Syria, Indonesia, Libya, Iraq and Saudi Arabia.

Performance Indicators during the first half of 2013