Arab Banking Corporation announces 2012 year-end profit of $205m

Total operating income amounted to $816m as against $818m in the previous year, despite the severe impact of the stronger dollar in translating the revenues of subsidiaries in 2012.

Strong revenues from our subsidiaries in MENA, Europe and Brazil, as well as from our Wholesale Banking and Treasury operations boosted the Group's earnings.

Operating expenses decreased by $11m to $403m. This is also due in part to currency translation from the stronger dollar, but overall positive operating leverage resulted in an improved cost to income ratio of 49.4% compared to 50.6% in 2011.

Operating profit before impairment provisions reached $413m (2011: $404m). Net impairment provision charge of $62m was $34m higher than last year.

This is partly due to prudent additional provisions made for regional and international exposures. It is noteworthy that the 2011 charge was cushioned by exceptional recoveries.

Asset quality remained very healthy as evidenced by the ratio of NPLs (non-performing loans) to gross loans declining to 3.2% from 3.5% in 2011.

After tax charge and share of minority interests, net profit for the year amounted to $205m. Net profit for the fourth quarter was $47m.

The Group's assets totaled $24,527m, 2% below last year. The Group continued to restructure the balance sheet by exiting low-yielding securities and growing the retail, corporate and trade finance businesses. Liquidity continues to be plentiful with liquid assets to deposits ratio at 60%.

Shareholders' equity at 31 December 2012 stood at $3,796m compared to $3,598m last year. ABC Group's capital adequacy ratio at 2012 year-end was very strong at 23.6%, predominantly Tier 1, which totalled 18.6 %.

Mr. Hassan Juma, President & Chief Executive of ABC, said, "The year's strong results demonstrate the earning capability from core businesses over the past several years despite the financial crisis which many major economies are still grappling with. With relentless focus on maintaining asset quality and cost discipline we have restructured the balance sheet and prepared a strong platform for expansion. We will remain vigilant in looking for asset growth in the face of the rapid compression in credit spreads regionally and in major economies since last year. Going forward, our product and geographical diversification and strong franchises in the niche markets we operate in place us in an excellent position to deliver consistent profits despite adverse conditions."

Commenting on the results, ABC's Chairman, Mr. Saddek El Kaber, stated, "I am delighted at ABC's results for the year, building on several years of steady and growing profitability. With very strong capital, liquidity and funding in place and assisted by the continued support from the shareholders, I am confident that ABC will continue to grow and further enhance its global presence as a leading Universal Bank in MENA."