ABC Islamic Bank reports $25.6 million net profit for 2008

ABC Islamic Bank reports $25.6 million net profit for 2008

Manama, Bahrain: Bahrain-based ABC Islamic Bank today announced a net profit for the year to 31 December 2008 of US$25.6 million, compared to a figure of US$50.9 million for 2007.

Gross operating income was US$33.8 million which, excluding an exceptional US$32.8 million capital gain in 2007 arising from the partial disposal of a sukuk investment, represented a 34% increase over the previous year. Reduced operating expenses led to a net operating income of US$28.84 million. This strong performance in core profitability reflected a higher proportion of fee income, enabling balance sheet growth to be kept down to 7.1% year-on-year. Unfortunately it became necessary to set aside provisions in the fourth quarter, which were a direct consequence of the impact of the economic slowdown in the region. Notwithstanding these provisions ABC Islamic Bank closed 2008 with a net profit for the year of US$25.6 million, compared with 2007’s net profit of US$50.9 million.

After signing the year-end accounts, ABC Islamic Bank Chairman and ABC Group Deputy Chief Executive & Head of International Wholesale Banking, Mr. Abdulmagid Breish, commented “While the performance on core business and revenue was satisfactory for 2008, more efforts will be made in 2009 to take the bank into higher level end products of a more structured nature.”

Reflecting on the year as a whole, Naveed Khan, Managing Director of ABC Islamic Bank said, “The growth in our operating results and profitability over the past four years clearly shows the achievements arising from our renewed focus on our target market customer base in the GCC and Arab world region. ABC Islamic Bank will continue offering a full range of Shari’a-compliant products and solutions to our customer base, from basic working capital needs to complex hedging structures combined with a comprehensive & innovative liquidity management platform.”

About ABC Islamic Bank

Arab Banking Corporation (ABC) launched its Islamic Banking Division through ABC Investment & Services Co. (E.C.) a wholly-owned subsidiary, based in Bahrain in 1987. The objective was to establish a leading Islamic banking unit, which conformed completely to Shari’a principles.

In March 1998 ABC Investment & Services Co. (E.C.) was converted into a fully fledged Islamic entity and was consequently renamed ABC Islamic Bank (E.C.), with the express purpose of reassuring customers and counterparties of the continued purity and integrity of its Islamic products and services. ABC Islamic Bank is supported by the ABC Group’s extensive global network, which includes ABC IB Islamic Asset Management in London in addition to ABC branch offices, subsidiaries and affiliates across the globe.

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