MANAMA: Al Baraka Banking Group BSC (ABG), the leading Islamic banking group with its headquarters in the Kingdom of Bahrain, achieved a net income attributable to equity holders of the parent of US$47 million in the first half of 2020 compared to US$56 million for the same period of 2019 with a decline of 16%.
While the total Group’s net income recorded during the first half of 2020 was US$ 90 million compared to US$ 95 million for the same period of 2019 with a 5% decline. The basic and diluted earnings per share for the first half of 2020 was US Cents 2.54 compared to US Cents 3.27 for the same period of 2019.
This decrease came as a result of the Group’s allocating of a significant increase in precautionary provisions to offset the expected damages resulting from the negative economic impact of the COVID-19 pandemic on the businesses of the Group and its unites. These provisions increased by 345% to reach US$ 127 million during the first half of 2020 compared to with US$ 28 million in the first half of 2019.
The Group’s total operating income increased by 25% during the first half of 2020 to US$ 553 million, compared to US$ 442 million during the first half of 2019. As a positive result of the Group’s ability to control expenses, net operating income increased by 62% to US$ 275 million during the first half of the year 2020 compared to US$ 170 million for the same period last year.
With regards to the statement of financial positions’ items, the equity attributable to the parent’s shareholders and Sukuk holders amounted to US$1.38 billion by end of June 2020 compared to US$ 1.47 billion by the end of December 2019, reflecting a decline of 6% due to foreign currency translation reserve, payment of cash dividends and payment of Tier 1 profits during the year. Total equity reached to US$ 2.16 billion by end of June 2020 compared to US$ 2.32 billion by end of December 2019, showing a decrease of 7%, due to the same reason.
Total assets of the Group showed a decrease of 1% by end of June 2020 to reach US$ 26.13 billion compared to US$ 26.26 billion by the end of December 2019. The Group focus during the first half of 2020 on maintaining a large portion of these assets in the form of liquid assets in order to face any emergency requirements of the units because of the COVID-19 pandemic.
Operating assets (financing and investments) amounted to US$ 20.43 billion as at the end of June 2020, compared to US$ 19.75 billion at the end of December 2019, increasing by 3%. Customer accounts including due to banks and financial institutions as at the end of June 2020 reached US$ 22.23 billion, a decrease of 1% compared to US$ 22.46 billion level at the end of December 2019, and represents 85% of total assets, which indicates the continued customer confidence and loyalty in the Group and the growing customer base.
Mr. Adnan Ahmed Yousif, member of the Board of Directors and President & Chief Executive of Al Baraka Banking Group, said: “We witnessed during the first half of this year unprecedented challenges that the world has not witnessed for a long time, which was represented by the outbreak of the COVID-19 pandemic in all countries of the world, resulted in wide damages and negative results across the various sectors, professions, institutions and societies, including banks and financial institutions. Based on our philosophy and model of socially responsible businesses, we have initiated a comprehensive strategy that do not only focus on maintaining the integrity of our financial conditions during the pandemic only, but also provides the required support to the societies in which we operate, and individuals, institutions and companies that deal with us, and at the same time maintain the sustainability of our services and the safety and protection of our employees”.