Bahrain Islamic Bank generates BD 7.4 million profits in 2005

In a statement issued yesterday, Wednesday, the Bank announced its 2005 financial results, generating a net profit of BD 7.4 million, an increase of 99 % over last year's BD 3.7 million.

The Chairman of the Board of the Bahrain Islamic Bank, Mr. Khalid Abdulla Al-Bassam, stated that this excellent result was due to the remarkable growth in the Bank's financing and investment operations. "This has resulted in a considerable increase in the total income from the various activities of the Bank, apart from realizing substantial rise in the shareholders' equity," Mr. Al-Bassam said.

"In the light of these excellent results, the Board of Directors has resolved to submit a recommendation to the Shareholders General Assembly to approve the payment of dividends at the rate of 27 % of the paid up capital, against the 22 % of last year. Additionally, grant shares will be distributed at the rate of 15 % as cash dividends plus 12 shares for every 100 shares held as a bonus dividends compared with 12 % cash dividends and 10 % bonus shares in 2004," the Chairman explained.

The Bank's Chief Executive Officer, Mr. Yousif Saleh Khalaf, said that the Operational Income of the Bank increased by BD 17.7 million, an increase of 63 %, against last year's BD10.8 million. He attributed this increase to "the sustained growth in the Bank's Islamic financing and to the diversified investment activities, as well as to the rewarding return on the Bank's real estate assets".

Mr. Khalaf added:

"The increase in the Bank's total income has contributed to raising the investment returns to BD 5.1 million, an increase of 144 % over last year's BD 2.1 million. This shows how the Bank is eager to distribute dividends to its investors, indicating a larger share in the rapidly increasing local market rates."

"In terms of the financial position of the Bank, the total assets have increased in 2005 to BD 321 million, an increase of 26 % over 2004. This increase was mainly due to the financing transactions in general and to the sustained growth in the Bank's good investment in Sukuks, equities, Mudara and real estate assets, in particular," the Chief Executive Officer pointed out.

The increase in the investments reserved for other than trading purposes include a significant increase in the fair value of the Bank's portfolio, an indication of the quality of such assets.

Mr. Khalaf emphasized the remarkable increase in the shareholder's equity which amounted to BD 72 million at the end of 2005, against the total shareholders' equity of the previous year.

"This increase of 36 % in the shareholders' equity is attributable to the positive change in the fair value of the Bank's investment in the shares of certain local and regional companies, thus enhancing the strong financial position of the Bank," he explained.

He pointed out:

"Our excellent financial results is a clear message to our shareholders, investors and customers in which we confirm our commitment to provide best customer services and a better added value to their funds. The dedication of our management team and of our outstanding employees throughout the various departments has contributed to these results. If such effort is continued, and I am confident that it will, 2006 will be another year of achievements for the Bank."

During the last year, the Bank entered as a principal underwriter in Kuwait's Lagoon City Sukuk for US$ 15 million, and launched several Sharia'a compliant financing products, including the "Ejara Montahia Beltamleek -Ownership Oriented Ijara" scheme and the "U Choose it ... We Finance it" car financing offer.

Two new branches were opened in 2005, in Budaya and in Hamad Town, which were highly appreciated by the public in general and by the Bank's customers in particular. The total number of braches throughout the country currently stands at 12. The Bank operates the largest local Islamic network, including an exclusively women branch, the first of its kind in the Kingdom of Bahrain.

In the social service area, the Bank has continued its leading role by sponsoring several economic and social activities, including the 12th World Islamic Banking Conference, the 5th Conference of the Sharia'a Boards of Islamic Financial Institutions, the First Women Week organized by the University of Bahrain, the Arab Kids Forum organized by the Bahrain Future Children & Youth Society, and other activities.

In-house, the Bank continued developing its human resources and preparing them for leading positions. Within this framework, the Bank participated in the US Executive Managers Programme. All employees of the Bank were set to attend a specially organized course to obtain the globally recognized International Computer Driving Licence (ICDL) Certificate, as the first regional bank to do so.

The Bahrain Islamic Bank was established in 1979 as the first Sharia'a compliant commercial bank in the Kingdom of Bahrain. Since then, it has developed and, as of the end of 2005, the Bank had nearly BD 72 million as shareholders' equity and more than BD 320 million assents.