BBK Q1 profits surge by 35%

The bank's profits for the period, attributable to the shareholders of the parent, were BD 9.01 million as compared to BD 6.68 million in the first quarter of 2005, an increase of BD 2.32 million.

The improvement in profitability was mainly driven by increase in net interest income which jumped from BD 7.37 million in the previous year to BD 9.66 million, an impressive increase of BD 2.29 million, or 31%. The growth in net interest income was driven by volume growth in customer deposits and loans.

The bank's other income also increased by over 13% to BD 6.19 million, from a level of BD 5.45 million in the previous year. The improvement was mainly in corporate commission and card related income.

Despite investing significant amounts on infrastructure build up, including a new core banking platform, total operating expenses for the quarter increased marginally by 4.5% to BD 6.00 million. As a result, the cost to income ratio improved significantly to 37.8% from 44.8% a year ago. No major provisions for loan losses were required during the quarter.

The bank has also shown healthy growth in its key balance sheet parameters for the quarter. Total balance sheet grew sharply to BD2,117 million, an increase of BD 600 million (39%) compared to March '05. This was mainly driven by 26% increase in customer deposits, which grew by BD 225 million to BD 1,100 million. Moreover, during the quarter ended 31st March 2006, the bank successfully raised US Dollar 500 million of medium term funds as part of its US Dollar 1 billion Euro Medium Term Deposit Notes programme. Customer loans and advances also grew by BD 69 million to BD 850 million, up 8.8% compared to March '05.

Driven by much improved operating results, the bank's basic earnings per share increased to 15 fils for the current quarter, compared to 11 fils for the same period last year. The return on average equity (annualized) improved to 21.9% from 17.5% and return on average assets (annualized) moved up to 2% from 1.8%, compared with last year.

Commenting on the results, Dr. Farid Al-Mulla, General Manager CEO, said 'the bank has shown excellent results driven by robust growth in underlying core business. The new aggressive corporate strategy for the years 2006-08 is in place which would further enhance performance, built on the principles of growth, quality and sustained profitability".