Al Salam Bank Q3 profit falls 80pc to $2.6 mn

BBN Report

MANAMA/November 10-2020:  Al Salam Bank-Bahrain has reported a net profit of BD972,000 ($2.6 million or AED9.54 million)) for the third quarter ended September 30, 2020, compared with BD4.9 million ($13 million or AED47.71 million) in the same period of 2019, reflecting a decline of 80.2 per cent.

For the nine months ended September, 30, 2020, the bank reported BD8 million ($21.4 million) net profit attributable to shareholders.

This represents a 54 per cent decrease compared with the BD17.2 million ($45.7 million) net profit reported in the same period in 2019.

The bank said its cautious provisioning approach in response to the implications of COVID-19 resulted in the decline in net profit for the periods.

Shareholders’ equity

Total shareholders’ equity was down 9 per cent from BD319.4 million ($847.1 million) at the end of 2019 to BD291.5 million ($773.1 million) as of September 30, 2020. This was owing to the losses stemming from the profit-free moratorium provided to financing customers in light of COVID-19, as mandated by the Central Bank of Bahrain (CBB).

Assets grow 9 pc

The bank’s total assets recorded robust growth, reaching BD2.2 billion ($5.9 billion) as of September 30, 2020, up 9 per cent from BD2 billion ($5.4 million) in December 2019

Total operating income for the quarter stood at BD24.1 million ($63.9 million) – a 7.2 per cent increase from BD22.5 million ($59.7 million) recorded for Q3. 2019.

Cost-to-income ratio

Operational efficiency was also maintained over the first nine months of the year, with a reduction in cost-to-income ratio to 48.8 per cent, compared with 52.5 per cent for the same period of last year.

The bank’s financing portfolio saw an impressive increase, standing at BD1.25 billion ($3.3 billion) at the end of September 2020 – a 16 per cent increase from the BD1.07 billion ($2.8 billion) recorded in December 2019.

Capital adequacy ratio (CAR) at the end of September 2020 stood at 26 per cent, up from 20.8 per cent at the end of the previous year.

Al Salam Bank-Bahrain’s Chairman, Shaikh Khalid bin Mustahil Al Mashani noted that the first nine months of 2020 have been marked by unprecedented instability and volatility for all sectors and industries across the board, and banking is no exception.

“Al Salam Bank’s pioneering spirit combined with its strategic yet flexible approach will see it continue to adapt, evolve and thrive in these unpredictable times,” the chairman added,

The Group CEO of the bank, Rafik Nayed, said that Al Salam team has worked tirelessly to minimise disruption, ensure continuity and respond to the fast-evolving needs of the bank’s customers during this period of global uncertainty.

“Core banking activities have performed exceptionally well and achieved steady growth despite the industry facing one of the most challenging and unpredictable periods in living memory,” Nayed said.

 

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