Robust balance sheet, high liquidity and BD 34.74 million (US$ 92.39 million) profit.
Dividend of 30 % recommended
National Bank of Bahrain has announced its financial results for the year ended 31 December 2008.
The Board of Directors of National Bank of Bahrain met on Tuesday 20 January 2009. In the meeting, chaired by the Bank’s Chairman, Mr. Abdulla Ali Kanoo, the Board reviewed and approved the Bank’s financial results for the year 2008.
Commenting on the financial results, Mr. Abdulla Ali Kanoo stated “The Bank achieved realistic growth in the underlying commercial banking business as a result of prudent policies, risk management strategies and tactical business plans. However, the turmoil in financial markets worldwide has affected valuations of investments in managed funds. The Bank is standing on solid financial platform after taking full provision for impairment in debt securities of institutions adversely impacted by the global financial crisis”. He expressed his appreciation for the Bank’s executive management team’s efforts in a difficult market environment. He thanked the Bank’s clients for their valued business relationship and the confidence reposed by them in the Bank and also the employees for their dedicated service, commitment and all round efforts.
The Bank recorded Net Income of BD 34.74 million (US 92.39 million) in 2008 compared to BD 41.56 million (US$ 110.53 million) in 2007.
Mr. Abdul Razak A Hassan Al Qassim, the Bank’s Chief Executive Officer said: “The Bank’s financial results must be viewed in context of the crisis in global financial markets. The Bank’s core areas of business continue to grow – both in business volumes and profitability. However our profitability has been adversely impacted by mark to market losses on our managed funds portfolio, resulting from the sharp decline in equity markets and the Bank’s decision to take 100% provision for investments in debt securities of institutions adversely impacted by the global financial crisis, where full recovery is in doubt. As a result, we ended the year satisfactorily profitable, albeit at levels below last year.”
The total Balance Sheet of the Bank exceeded the BD 2 billion in diversified and acceptable rated assets. Loans and Advances showed a strong growth of 15.8 % to reach BD 1,095.71 million (US$ 2,914.13 million) as at 31st December 2008. Deposits also showed an impressive growth of 15.1 % to reach BD 1,519.25 million (US$ 4,040.57 million) at the year-end. Capital Adequacy Ratio remains very strong at 19.3 %. Liquidity continues to be comfortable with liquid assets (Cash and balances with central banks, Treasury bills and placement with financial institutions) representing 25 % of the total assets. Mr. Al Qassim added that he is satisfied with the consistent progress in the overall business of the Bank and believes that with the strong financial position of the Bank, NBB will be able to safely overcome the current financial turmoil. He assured all stakeholders that the robust and prudent business strategies will be continued going forward.
Net Interest Income increased by 9.2 % to BD 46.06 million (US$ 122.49 million) mainly on account of strong growth in loans and advances and customer deposits, despite lower yield on deployment of surplus liquidity in the background of falling interest rates.
Other Income from core banking activities reflected good growth, mainly through higher fee and commission income in both domestic and overseas operations. Despite higher foreign exchange income, treasury activities were affected by negative returns on managed funds.
Operating expenses increased marginally from BD 23.47 million (US$ 62.43 million) in 2007 to BD 24.01 million (US$ 63.86 million) in 2008 mainly on account of staff expenses due to annual salary adjustments and additions to the Bank’s human resources to meet expanding business needs while other operating costs, associated with system upgrades to improve operational efficiency and customer service increased marginally.
Based on the above results, the Board of Directors has decided to recommend to the Shareholders’ General Assembly, the following appropriations:
|Dividend - 30 %
|Donations and Contributions
||4,619,527 ) |
Total Shareholders’ Equity now stands at BD 217.39 million (US$ 578.15 million). The appropriations to Donations and Contributions will bring the total allocation under the programme to BD 22.83 million (US$ 60.72 million) since its inception in 1980. During the year, the Bank disbursed BD 0.99 million (US$ 2.63 million) for several worthy causes in the Kingdom of Bahrain. In this regard, Mr. Kanoo stated, “The Bank considers it an honour and a privilege to serve the community at large and contribute to the welfare of citizens in the Kingdom of Bahrain”.
Looking ahead, Mr. Qassim said: “We are cautiously optimistic about the prospects for 2009. Our strategy is to further reinforce our leadership position in the domestic market. We are encouraged by the opportunities that will open up for the Bank in the aftermath of these turbulent times, which we believe can be advantageous to us considering our heritage, history and brand image as a strong local bank. With our core competencies, brand franchise and diversified products and services we are well positioned to translate opportunities and market potential into increased value for all our stakeholders”.