BBK reports 5.6% increase in net profit

Attributable to owners to reach BD 44.9 million for the 9 months ended 30th September 2017

23/10/2017 16:04 AST

BBK's Board of Directors yesterday reviewed and approved the financial results of the bank for the nine months ended 30th September 2017, declaring a net profit attributable to owners of BD 44.9 million compared to BD 42.5 million achieved during the corresponding period last year, an increase of 5.6% year-on-year. The net profits for the nine months ended 30th September 2016 was restated to reflect the impact of IFRS9 implementation of negative BD 0.8 million. Earnings per share amounted to 38 fils compared to 40 fils last year.

The Board of Directors expressed their satisfaction on the results stating "we are very pleased with the good growth and steady performance achieved during the first nine months of 2017. The bank's consistent profit growth despite the challenging market conditions both locally and internationally, demonstrates BBK's strong position as a pioneer in retail and commercial banking in Bahrain and the region. BBK's strategy which adapts to the changing market conditions, provides support and solid foundations to continue delivering excellent results and enhancing shareholders' value."

The growth in the net profit was fueled by the increase in operating revenues by 6.8% to reach BD 107.6 million for the nine months till end of September 2017, compared to BD 100.7 million reported during the same period of 2016. This was primarily attributable to strong growth in other income (fees and commissions, foreign exchange and investment income), which witnessed an increase of 13.6% to BD 35.9 million compared to BD 31.6 million reported for last year supported by the bank's income diversification initiatives. Similarly, Net interest income increased by 3.5% year-on-year to reach BD 67.7 million (YTD 2016: BD 65.4 million) and BBK's share of profit of associated companies and joint ventures increased by 6.4% to BD 4.0 million (YTD 2016: BD 3.7 million).

During the year, the bank introduced the first Interactive Teller Machine in Bahrain and launched the Virtual Queuing App to enhance customers' experience and enable them to conduct their banking transactions more efficiently. Such continuous investment in upgrading the bank's systems and networks, and investments by the bank to develop its human capital, promoted a modest increase in operating costs of 3.1% for the 9 months period ending September 2017 to stand at BD 39.6 million compared to BD 38.4 million reported during the same period last year. Notwithstanding the increase in the cost, the cost to income ratio, however, showed an improvement from 38.1% to 36.8%.

BBK continued to preserve its robust financial position and build resilience by maintaining prudent provisions for impaired assets. To that end, and in line with the higher provisioning requirements mandated by IFRS 9's expected loss model, BBK increased net provision allowance by BD 22.1 million during the nine months ending September 2017 (YTD 2016: BD 19.0 million).

Total comprehensive income for the first nine month of 2017 attributable to owners increased from BD 36.2 million as of 30th September 2016 to BD 51.6 million, mainly due to improvement in the fair value reserve of investment securities and higher net profit during the current year.

For the three months ended 30th September 2017, total revenues increased by 5.4% compared to the corresponding period of last year reaching BD 37.2 million due to healthy growth across all revenues streams. Operating costs increased marginally by 2.1% to BD 13.0 million. Net provision charges for the third quarter of 2017 increased to BD 11.2 million compared to BD 9.5 million during the same period of last year. Accordingly, the net profit for the third quarter of 2017 at BD 12.7 million is in-line with the profit reported in the same period last year.

Press Release