Ithmaar Bank posts profit of $85m and maintains liquidity above 23% of its total assets

There has been significant growth in both the total assets and funds under management. The results for 2008 were reviewed and approved by the Board of Directors on 27 February 2009.

The Board of Directors also proposed, subject to approval from the Central Bank of Bahrain (CBB) and shareholders at the Annual General Meeting (AGM), to issue one bonus share for every ten shares held.

"At the outset of the current global financial crisis, the group, following Board directives, focused upon protection of the group's assets and liquidity, rather than upon pursuing new business initiatives. This prudent approach has been reflected in a stringent review of the carrying value of the group's assets and an unrealized impairment provision of $52.9m has been made," said Michael P. Lee, Ithmaar Bank CEO and Board Member.

"We are pleased to report that Ithmaar Bank's balance sheet remains strong, with liquid assets at $1.3bn, representing around 23%, up from $0.6bn or 14.5% at year-end 2007, of the total assets. Our capital adequacy ratio is 14%," he said. "Total assets increased by 31.9% to $5.4bn and funds under management increased by 15.5% to $2bn," said Lee.

"The growth from the group's retail and corporate banking operations has continued, though certain investment banking initiatives have been impacted by the current global financial crisis," he confirmed. "Operating income at $279.9m is 19.3 per cent lower than for 2007, and during the year we initiated several cost control measures - as a result, operating costs, at $115.1m, are $7.6m lower than for 2007," said Lee.

"Of the unrealized impairment provision of $52.9m, $21.1m is attributable to declines in the value of certain listed investments in the GCC and Asian stock markets. These investments are held as part of available-for-sale investments securities," he said.

"Even with the fourth quarter $40.4m deficit, mainly reflecting unrealized impairment provisions, we still produced $85.2m in consolidated profits for 2008," said Lee.

"In the most challenging year for financial institutions worldwide over many decades this achievement is testimony to our group's well-diversified business lines and geographic spread, which also make us well-positioned for future organic growth, once the adverse business environment returns to normalcy. Meanwhile, we stand ready to seize opportunities for prudent business development in accordance with the group's robust medium-term strategy," he added.

"During 2008, we acquired a 25.4% stake in BBK, a leading Bahrain-based retail bank which also has overseas operations in Kuwait and India," said Mohamed Hussain, Ithmaar Bank Co-CEO and Member of The Board.

"Our development arm, the Ithmaar Development Company (IDC), for example, announced that its flagship development, Dilmunia, was fast taking shape. In mid 2008, we announced that we had successfully arranged a consortium of regional institutional investors to launch Naseej (Under Formation), the region's first fully integrated infrastructure and real estate development company. Naseej will manage the entire spectrum of the construction and real estate business, from the initial planning stages, to the manufacture of building materials, financing, and marketing advisory services for developments," Hussain said.

In doing so, it will create unprecedented synergies that will help create affordable housing solutions to the general public," Hussain said. "Before the end of the year, the Promoter Shareholders had signed a formal agreement to create the company with an issued share capital of BD180m ($477.5m)," he said.

"Earlier, in August, we created an alliance with Gulf Finance House and Abu Dhabi Investment House, and together announced three visionary new initiatives. Current Vision3 initiatives include InfraCapital, the GCC's first investment bank specializing in the provision of tailored infrastructure development and finance; AgriCap, a new investment vehicle focused on serving agricultural ventures and Hospitality Development Fund to be established to nurture and support opportunities across the global hospitality sector," said Hussain..

"During the January 2009 World economic Forum in Davos, Vision3 and the Moroccan government announced the signing of Letter of Intent to develop a $1.8bn mixed-use health resort over a massive 270 hectare area in Essaouira, Morocco to promote health tourism and foreign direct investment," he added.