Securities & Investment Company (SICO), licensed by the Central Bank of Bahrain as a conventional wholesale bank, announced today its financial results for the fourth quarter and full fiscal year ending 31 December 2014.
Net consolidated profit for fiscal year 2014 increased by 11.3% to BD 5.4 million, compared with BD 4.9 million in 2013; while operating income grew by 16.4% to BD 12.4 million from BD 10.6 million the previous year. Basic earnings per share rose to Bahraini fils 12.68 from 11.41 fils in 2013.
Brokerage and other income for the full year increased by 110% to BD 2.6 million compared with BD 1.2 million in 2013. This illustrates SICO’s success in achieving the desired sustainable growth in brokerage activities, which cover most of the Arab capital markets; as well as its ability to provide clients with corporate finance advisory services. Net fee and commission income grew by 10.7% to BD 4.4 million compared with BD 4 million in 2013, reflecting the sustainable growth in assets under management resulting from receiving new client mandates during the year.
Net investment income and net interest income remained largely unchanged from last year at BD 3.9 million and BD 1.4 million, respectively. This demonstrates the proactive and prudent management of the proprietary book, which enabled SICO to respond successfully to the market volatility in 2014. Total operating expenses, which include staff overheads, general administration and other expenses, were BD 6.4 million compared with BD 5.4 million in 2013.
Total operating income for the final quarter of 2014 was BD 671 thousand compared to BD 3.5 million for the corresponding period in 2013. Net consolidated loss for the fourth quarter of 2014, which includes provisions for impairment of BD 366 thousand, was BD1.4 million compared with BD 1.6 million net profit for the same period in 2013.
As at 31 December 2014, total balance sheet footings had increased by 24.5% to BD 117.3 million compared with BD 94.2 million at the end of the previous year. Assets under management grew by 7% to BD 338.9 million from BD 316.9 million at the end of 2013; while assets under custody with the Bank’s wholly-owned subsidiary – SICO Funds Services Company – grew by 30% to BD 1.636 billion from BD 1.258 billion at end-2013.
SICO continued to maintain a strong capital base, ending the year with shareholders’ equity of BD 62.7 million, and a strong consolidated capital adequacy ratio of 63.65%. Available-for-sale securities at the end of 2014 declined to BD 28.8 million (end-2013: BD 32.7million), while investments at fair value through profit or loss dropped to BD 17.3 million (end-2013: BD 19.8 million).
Commenting on these results, Shaikh Abdulla bin Khalifa Al Khalifa, Chairman of Securities & Investment Company, said: “Despite the severe volatility in GCC markets during the fourth quarter of the year following the decline in oil prices, I am pleased to report that the Bank posted a strong financial performance in 2014. Our financial results reflect the growth in profitability by all our core business lines.”
“We are confident about the future outlook for SICO. The IMF has forecast GDP growth of around 4% in 2015 for the region, despite risks arising from the decline in oil prices. The Board has full confidence in the ability of our high-calibre management team to capture new business opportunities and address all future challenges.”
According to Ms Najla M Al Shirawi, Chief Executive Officer of SICO: “Building on our solid achievements in 2014, we will continue to develop new products, geared towards identifying opportunities with attractive risk adjusted returns to our clients . Our focus will remain on delivering outstanding service and performance, which would directly result in further growth in our fee-based revenues.”
“There is a new reality in GCC markets post the plunge in oil prices of around 48% in 2014 ,the GCC economies are still relatively better positioned than the rest of global oil producers to sustain an extended period of lower oil prices, supported by healthy reserves and currency stability. Furthermore, with additional steps being taken towards the liberation of GCC markets – allowing direct foreign ownership in Saudi expected in 2015, along with the inclusion of UAE and Qatar indices in the MSCI Emerging Markets Index in 2014– this should make the GCC markets an interesting investment proposition for global asset managers, which would help to further institutionalise GCC markets,” Ms Al Shirawi pointed out.