$6.6m half-year profit for ABC Islamic Bank

Net profit for the second quarter was $1m compared to $5.6m in the first quarter, primarily due to impact of the economic slowdown in the region, lower fee earnings and prudent impairment provisions taken for regional exposure.

Total income for the second quarter amounted to $10.6m versus $13.7m in 1st quarter of 2009, which reflects lower business activities, rates & fees. In tandem profit paid on Murabaha payables also decreased to $6m versus $7.1m reflecting lower rates.

Shareholders' equity as at June 2009 stood at $151m, compared to $135.2m at the end of the first quarter, the increase during the quarter coming from improvement in fair values of available-for-sale investments as well as the profit for the period. As a result the Capital Adequacy ratio improved to 18.9% in June 2009 compared to 17.9% in the first quarter and which is well above the required 12% set by the regulator.

ABC Islamic Bank's total assets remained largely unchanged at $1.37bn in June 2009, compared with $1.39bn at the end of the first quarter.

Commenting on the results, Mr. Naveed Khan, Managing Director, ABC Islamic Bank, said:

"The results are in line with the profitable operations of the parent and reflect the challenges against the backdrop of the global economic slowdown. We feel optimistic that these challenges will be met adequately, and in line with shareholder expectations."

"Meantime, ABC Islamic Bank remains very liquid, with improved solvency ratios and with all the resources of its 100% shareholder Arab Banking Corporation," he added.