Ithmaar Bank returns to profitability

The announcement, by Ithmaar Bank Chairman His Royal Highness Prince Amr Al Faisal, followed the review and approval, by the Board of Directors, of the Bank's consolidated financial results for the three-month ended 31 March 2013.

"On behalf of the Ithmaar Bank Board of Directors, I am pleased to announce Ithmaar Bank's return to profitability," said HRH Prince Amr.

"In addition to reporting a profit for the first quarter, I am also pleased to report that operating income continues to be stable, at BD19.4m, despite a compression of margins from overseas subsidiaries due to cuts in benchmark profit rates," he said.

"Cost control continues to be our focus," said HRH Prince Amr.

"In the first quarter of 2013, total expenses were reduced by about 6% - an achievement that is made all the more impressive considering our continuously expanding retail banking network. Ithmaar has also continued to take prudent impairment provisions," he said.

"As a result, net income before provisions for impairment and overseas taxation has increased by 31% to BD2.2m in the first quarter of 2013 compared to BD1.6m in the same period last year," said HRH Prince Amr.

"The balance sheet marginally increased but the core business continues to grow with Murabaha and other financings, increasing by 5.5% to BD1.186bn in the first quarter of 2013 compared to BD1.124bn as at 31 March 2012, and the equity of unrestricted investment account holders increased, by 10.4%, to BD662.6m in the first quarter of 2013, compared to BD600.1m as at 31 March 2012," he said.

"Liquidity has also improved in the first quarter of 2013," said HRH Prince Amr.

"In fact, liquid assets, comprising cash, balances and commodity placements with banks, financial and other institutions, now represent about 15% of the balance sheet," he said.

"Following its transformation into an Islamic retail bank, Ithmaar has continued to exit from its investment banking portfolio which declined 12.6% to BD393.5m in the first quarter of 2013 compared to BD450.5m as at 31 March 2012," said HRH Prince Amr.

"During the Quarter, Ithmaar also completed the transfer of business and the share swap agreement with First Leasing Bank (FLB) resulting in increasing Ithmaar's share capital by BD21.4m," said HRH Prince Amr.

Ithmaar Bank Chief Executive Officer and Member of the Board, Mohammed Bucheerei, said the Bank's return to profitability is testimony to the success of its efforts to focus on core retail and commercial banking operations.

"Since our transformation, Ithmaar has continued to work towards realising the board-approved vision of becoming the region's premier Islamic retail bank," said Bucheerei.

"The results of these efforts are now clearly beginning to pay off," he said.

"We are continuing, for example, to expand our retail banking network and, last month (ed note: 24/04/13) we inaugurated a new, full-service branch exclusively for women. The new branch, which brings to 17 the total number of branches in our fast growing network of retail branches, was commissioned to address the specific requirements of our female customers. It is an example of our commitment to becoming the Islamic bank of choice," he said.

"Ithmaar is firmly commitment to becoming the region's premier Islamic retail and commercial bank as we continue to increase our focus on core banking activities while working towards restructuring our investment portfolio," said Bucheerei.

"Ithmaar now boasts one of the largest retail banking networks in Bahrain with 17 full service branches and 43 Automated Teller Machines (ATMs) in 26 strategic locations around the Kingdom. We will continue to work towards further developing our core retail business in the year ahead with the commissioning of additional new branches as well as the introduction of new products and services," he said.

Ithmaar's achievements have helped earn the Bank international kudos, with the Bank's Mobicash offering earning multiple awards including the "Best Mobile Banking Service" award at the Banker Middle East Products Award 2013 and the prestigious UN-based "World Summit Award mobile (WSA-mobile)."

The awards stand testimony to the Bank's growing success and underscore its commitment to becoming the region's premier Islamic retail bank.