Arab Banking Corporation announces $75m half year profit

Total operating income for the second quarter amounted to $177m, 4% above $170m in the first quarter, driven by strong growth from our Brazilian subsidiary, Treasury and Retail operations.

Group operating expenses increased marginally to $90m compared to $88m in the previous quarter, however the cost/income ratio improved to 51% from 52%.

Operating profit before impairment provisions registered a 6% increase to reach $87m.

Impairment provision of $22m was taken during the quarter, $10m higher than last quarter which had included some exceptional recoveries.

Shareholders' equity at 30 June 2010 stood at $3,311m, compared to $3,243m at the end of the first quarter, the increase during the quarter coming from improvement in fair values of non-trading securities and net profit for the period. ABC's capital base remains very strong with a capital adequacy ratio of 23.9%, predominantly Tier 1, which totalled 19.2%.

ABC's liquidity remains comfortable with the liquid assets to deposits ratio at 76%, compared with 74% at the end of the previous quarter.

Mr. Hassan Juma, President & Chief Executive of ABC, said:

"I am pleased that ABC continues to show strong results, benefiting from the Group's well-diversified business lines across various geographies demonstrating stability in its earnings stream despite the challenging economic environment faced regionally as well as in the US and Europe."