Tuesday 13, February 2018 by Jessica Combes

Bank ABC 2017 net profit up six per cent YoY


Bank ABC (Arab Banking Corporation B.S.C.) has announced its results for the year ended 31 December 2017.

Consolidated net profit, attributable to the shareholders of the parent, for the year 2017 was $193 million, six per cent higher compared to $183 million reported for the previous year, while net profit for fourth quarter was $42 million, 27 per cent higher compared to $33 million in Q4 2016.

On a headline basis, total operating income was $869 million against $865 million reported for the last year, and normalises to a seven per cent growth, after adjusting for effects of foreign currency hedging transactions in Banco ABC Brazil (BAB), which have an offsetting tax charge impact.

Operating expenses were at $462 million, $26 million higher than last year, due to continuing investment costs as well as some currency translation impact, while impairment charges for the year were $96 million compared with the previous year’s $92 million, resulting from the after impact of recessionary conditions in Brazil although these have been stabilising more recently.

The ratio of non-performing loans to gross loans at 3.5 per cent improved from 2016 year-end levels of 4.1 per cent, and normalises to 2.6 per cent, when legacy fully provided loans are adjusted for. Tax charge $58 million, compared to the charge of $103 million for 2016 (the variance largely arising from the tax treatment of currency hedges in BAB noted above).

“We are pleased to see the continuing progress of the Group with improved growth in profitability of 6 per cent year on year. This year also saw the expansion of our network footprint to Dubai and Singapore as new branches were opened, underpinning our strategic intent to be MENA’s leading international bank. In addition, we are making advances with our digital transformation in a number of areas. We are cautiously optimistic on the positive signals emerging in many of our core markets, which should build momentum into our businesses. Our balance sheet and risk metrics continue to remain one of our key focus areas and benchmark well against regional and international standards,” said Saddek Omar El Kaber, Bank ABC's Group Chairman.

strong>Balance Sheet

  • Total assets stood at $29.5 billion at the end of 2017, comparable to $30.1 billion at the 2016 year-end, as the Group continues to prioritise asset quality and returns.
  • Deposits at the end of the year were $20.2 billion similar to 2016 year-end.
  • Customer deposits increased by $2.5 billion during the year, resulting from repositioning the composition of liabilities.
  • Liquidity ratios strong with LCR and NSFR on a Basel III basis exceeding 100 per cent with comfortable buffer and liquid assets to deposits ratio healthy at 55 per cent.
  • Capital Ratios strong: Tier 1 17.7 per cent and total capital adequacy ratio (CAR) 18.7 per cent.

On this occasion, the Board of Directors recommend, for approval at the Annual General Meeting to be held on 25 March 2018 in Bahrain, a cash dividend distribution of three per cent of the issued share capital ($0.03 per share), translating to approximately 48 per cent of the net profit for the year, attributable to the shareholders of the parent, amounting to $93,300,000.




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