MANAMA, BAHRAIN: Al Baraka Banking Group BSC (ABG), the leading Islamic banking group with its headquarters in the Kingdom of Bahrain, achieved a net income of US$ 180 million in 2019, while net operating income reached US$ 399 million and total operating income US$ 967 million in the same period.
Total assets increased to exceed US$ 26 billion at the end of December 2019 compared to end of December 2018.
Al Baraka Banking Group recorded a strong increase in revenue during the fourth quarter of 2019, indicating the improvement in the businesses of the Group’s units towards the end of the year.
With regard to the performance of the Group for the year 2019 as a whole, the profitability results were affected due to monetary and geopolitical developments that prevailed during most months of the year in countries where the Group’s units operate, in addition to providing more prudential provisions for its banking unit in Turkey in order to enhance the integrity of its financial conditions and enable it to continue growing in the Turkish market, which is one of the main markets of the Group.
All units of the Group were able to achieve positive results during the year 2019, which indicates that despite the fluctuation of Group’s profit flows between one banking unit and another and between a quarter and another due to the business conditions and currency price fluctuations, it maintained the integrity of its overall financial position and durability and sustainability of its profit sources sectoraly and geographically, as a result of the Group’s presence in 17 Arab, Asian, Middle Eastern and African countries.
Total operating income reached US$ 967 million in 2019, decreasing by 2% compared to US$ 988 million in 2018. After deducting operating expenses, which increased by 5% due to higher investments in technology and digital transformation strategy, net operating income reached US$ 399 million, a decrease of 11% compared to US$ 477 million in 2018. After deducting the provisions and taxes, total net income reached US$ 180 million in 2019, a decline of 17% compared to US$ 217 million in 2018.
Net income attributable to the shareholders of the Group was US$ 106 million, a decrease of 18% compared to US$ 129 million in 2018. Basic and diluted earnings per share reached US Cents 6.01 compared to US Cents 7.97 for the year 2018.
With regards to the results of the fourth quarter as compared to the corresponding period last year, the Group revenues grew strongly and total operating income reached US$ 290 million, increasing by 61%. Net operating income for the fourth quarter reached US$ 131 million, showing an increase of 181% compared to the same period last year. After increasing prudential provisions for Turkey, total net income for the quarter reached US$ 48 million decreasing by 9% and net income attributable to the parent quarter reached US$ 22 million, slowing down by 29%.
Due to the improvement of local currencies for most of the year in a number of countries where the Group’s units operate, the consolidated balance sheet of the Group reached at US$ 26.3 billion at the end of December 2019, an increase of 10% compared to US$ 23.8 billion at 31 December 2018. The Group maintained a large portion of these assets in the form of liquid assets.
Operating assets (financing and investments) amounted to US$ 19.8 billion as at the end of December 2019 compared to US$ 17.9 billion at 31 December 2018, increasing by 11%. Customer accounts including due to banks and financial institutions as at the end of December 2019 reached US$ 22.5 billion, an increase of 14% compared to US$ 19.6 billion level as at the end of December 2018, and represents 86% of total assets, which indicates the continued customer confidence and loyalty in the Group and the growing customer base. Total equity reached US$ 2.3 billion at the end of December 2019, increasing by 3% compared to the end of December 2018.
Based on this performance, the Board of Directors recommended to the AGM to distribute cash dividends of US$ 0.02 for each outstanding shares, subject to regulatory and AGM approvals.
Commenting on the performance and results of the Group during 2019, HE Sheikh Saleh Abdullah Kamel, Chairman of Al Baraka Banking Group, said, “Due to our full commitment to providing real participatory banking model in the 17 communities where our Group’s units operate, we fully realize the nature of exposures we face and consider them as a part of our business model in servicing these communities. Based on this, we consider the results achieved in 2019 as very good results, especially that all our units contributed to achieving them given their well established presence in the markets and sound and growing financial performance.”
For his part, Mr. Abdulla Ammar Al Saudi, Vice Chairman of ABG, said, “The results achieved by the Group and its units in 2019 confirm that they stand for sound fundamentals in terms of the healthy financial conditions, technical and human resources and long experience in its local markets. This can achieve sustainable growth in business and revenues, but are sometimes affected by geopolitical and financial developments surrounding these markets.