Bank of Sharjah announces financial results for year ended December 31, 2012

Total Assets reached Dhs22,859m, 9% above the December 31, 2011 figure of Dhs20,934m.

The Bank continued to grow its deposit base which reached Dhs16,476m as of December 31st, 2012, 10% over the December 31, 2011 figure of Dhs14,940m.

Loans and Advances reached Dhs12,473m, 4% above the December 31, 2011 figure of Dhs12,039m.

The continued increase in deposits over loans and advances has enhanced the loans-to-deposits ratio which further improved during the year to 0.76 in December 2012 from 0.81 in December 2011. This led to the 26% surge in net liquidity which reached Dhs6bn by the end of 2012 compared to Dhs4.8bn at the end of 2011.

The 6% decline in net interest income was mainly driven by the 10% increase in deposits, in addition to the excess liquidity which is placed at extremely low interbank interest rates. The 11% increase in non interest income was driven by the improvement witnessed in the financial markets during the last quarter of the year.

The collective impairment provision for the 2012 year has declined against a backdrop of an improved economic environment and the overall performance of the credit portfolio. During the year, the Bank has set aside Dhs115m of such provisions, raising the Bank's cumulative balance of collective impairment provision to Dhs658m.

All the above, led to the 9% increase in the current year net profit to reach Dhs277m versus Dhs254m for the year ending December 31, 2011. As a result, earnings per share for the year gained 20% and reached 13.5 fils compared to 11.2 fils in 2011.

Total comprehensive income grew by 13% to reach Dhs273m versus Dhs242 in 2011 on the back of the improvement in the financial markets. In line with the Bank's expansion strategy to further avail its services to existing and prospective customers throughout the country, the Bank has taken a number of initiatives during the year. It has expanded its Private Banking Wealth Management (PBWM) division in collaboration with Commerzbank International S.A. Luxembourg.

This step will widen and diversify the reach of the Bank's financial services by catering to a niche market of discerning customers. Furthermore, a new branch was opened in Dubai Media City and work is well underway to open a branch in Mussafah, the industrial area of Abu Dhabi.

Commenting on the results, Mr. Varouj Nerguizian, the Bank's Executive Director and General Manager, said, "The 2012 results affirmed the solid structure of the Bank's balance sheet. The Bank's ample liquidity in addition to its expansion strategy will competitively position the Bank and allow it to take full advantage of the positive developments in the economical scene of the UAE. While profitability improved by 13% it remained subdued by across the board application of new regulatory guidelines geared more towards retail activity than the corporate model of the Bank. The real potential of Bank of Sharjah will be revealed by a number of positive developments in strategic investments during 2013-2014."