BBK profits continue to grow, up 21%

The bank's profits for the period, attributable to the shareholders of the parent, were BD 16.32 million as compared to BD 13.49 million in the first half of 2005.

The main contributors to the much improved profitability were growth in net interest income, coupled with marginal increases in operating costs. The net interest income for first half'06 at BD 19.96 million was BD 3.5 million or 21% higher when compared to the same period in 2005. The growth was mainly driven by volume increase in customer deposits, investment portfolio and customer loans.

The bank's other income for the period also increased by 11.8% to reach BD 11.09 million, mainly on account of higher managed funds income, card related income and corporate fees.

The operating costs were almost flat, increasing marginally by 1.4% or BD .17 million in the first half of '06 compared to the previous year. This reflected a strong focus on containing cost, though at the same time the bank continued to invest in infrastructure and staff development. As a result, the cost to income ratio improved significantly from 44.9% a year ago to 38.6% for the current year. Although the bank follows a prudent policy on provisioning against impaired assets, the net provision change for the quarter '06 as well as for the half year '06 was not significant. This was achieved on account of strong focus on proactive remedial management and credit risk management.

The bank has shown a robust growth in its key balance sheet parameters for the year 2006. The total balance sheet at BD 1,733 million grew sharply by 15.6%, or BD 234 million, when compared to Dec'05. This was achieved by 16.2% growth in customer deposits which grew by BD 139 million to reach BD 1,003 million. The loans and advances at BD 886 million grew by 11.4% compared to Dec'05. During the current year, the bank also raised USD 500 million of medium term funds as part of its USD 1 billion EMTDN programme.

The good results for the current half year also resulted in much improved performance indicators. The bank's basic earnings per share for the first half 2006 increased to 26 fils for the current half year, compared to 21 fils for the same period last year. The return on average equity (annualized) improved to 19.9% from 17.2% and return on average assets (annualized) also moved up from 1.77% to 1.79% compared with first half year of 2005.

Commenting on the bank's financial results for the half year of 2006, Dr. Farid Al-Mulla, General Manager CEO, expressed his satisfaction with the progress and excellent profits that the bank continued to make, driven by robust growth in underlying core business. He thanked the shareholders for their continuous support, customers for their trust and patronage and the bank employees for their commitment and hard work. He added that the bank was dedicated to implementing its new aggressive corporate strategy for the year 2006-08 that would enhance its franchise and market position, and achieve greater value for its stakeholders.