BBK Q3 profits rises to BD 24 million, up 18.4%

The bank's profits for the period, attributable to the shareholders of the parent, rose to BD 24 million as compared to BD 20.27 million in the previous year.

The improvement in profitability was mainly driven by continuous growth in net interest income and other income. The net interest income for first nine months of 2006 at BD 30.12 million grew impressively by BD 4.40 million or 17% when compared to the same period in 2005. The growth was driven by increase in average balances of customer loans & deposits and investment securities.

The bank's other income for the period also increased to BD 16.65 million from BD 14.69 million in the previous year, an increase of over 13%. The main contributors to the increase were card income, foreign exchange income, investment income and corporate & other commission income.

The operating expenses for the period increased by BD 1.36 million (7.7%) as the bank continued to invest in further building the business. Despite the increase, the bank's cost to income ratio improved to 40.7% from 43.8% a year ago due to strong growth in operating income.

The bank follows a prudent policy on provisioning against impaired assets, which resulted in higher net provision charge for the nine months period in 2006. On the other hand, the bank's strong focus on credit risk management and proactive remedial management continued.

The bank has also shown a healthy growth in its balance sheet which increased to BD 1,683 million, an increase of BD 184 million or 12.3% when compared to Dec'05. The growth was mainly supported by impressive increase of 15% in loans and advances to customers, which grew to BD 914.7 million from BD 795 million as at Dec'05.

Driven by improved operating results, the bank's performance indicators also showed positive trends. The bank's basic earnings per share for the current nine months period increased to 37 fils, compared to 32 fils for the same period last year. The return on average equity (annualized) improved to 19.1% from 17% and return on average assets (annualized) also moved up from 1.73% to 1.79% compared with first nine months of 2005.

Commenting on the bank's results, Dr. Farid Al-Mulla, General Manager CEO, expressed his satisfaction with the progress made and improvement in the core profitability, including increase in non-funds income across all the banking activities. He added that the bank continued to invest in human resources, infrastructure and development of new businesses, in line with new corporate strategy 2006-08 now under implementation, which would bear fruit in the future. He thanked the bank's shareholders for their continuous support, customers for their patronage and the employees for their commitment and hard work.