2012 Fourth Quarter Results - Press Release

2012 Fourth Quarter Results - Press Release

Net Profit of BD 47.50 million (US$ 126.33 million), increase of 4.1% over 2011
Higher Dividend of 35% (25% cash & 10% stock) proposed [2011: 30% cash]

  

National Bank of Bahrain achieved a Net Profit of BD 47.50 million (US$ 126.33 million) in 2012, compared to BD 45.64 million (US$ 121.38 million) recorded in 2011, an increase of 4.1%. Strong growth in revenue and careful expense management resulted in an Operating Profit before Provisions of BD 59.27 million (US$ 157.62 million) for 2012, an increase of 11.2 % over the previous year. For the fourth quarter of 2012, the Bank recorded a Net Profit of BD 10.47 million (US$ 27.85 million) compared to BD 9.69 million (US$ 25.77 million) for the corresponding period of the previous year, an increase of 8.1%.

  

At the Board of Directors meeting held on Monday, 21 January 2013, chaired by the Bank’s Chairman, Mr. Farouk Yousuf Khalil Almoayyed, the Board reviewed and approved the Bank’s financial results for the year 2012.

Expressing his satisfaction over the performance, the Bank’s Chairman Mr. Farouk Yousuf Khalil Almoayyed said “these results are a testimony to the resilience of the Bank’s business model which focuses on balanced growth” and thanked the Bank’s clients for their valued business relationship and the confidence reposed by them in the Bank. He expressed his appreciation for the Bank’s executive management team’s efforts and thanked the employees for their dedicated service, commitment and all round efforts.
Mr. Abdul Razak A Hassan Al Qassim, the Bank’s Chief Executive Officer & Director said: “The Bank maintained its growth momentum during the year with an impetus on selectively expanding the loan book while efficiently deploying surplus liquidity in other earning assets resulting in a strong increase in business volumes and revenue.”

Net Interest Income for the year at BD 61.92 million (US$ 164.68 million), showed an increase of 11.8% on account of growth in earning assets supported by a strong growth in customer deposits besides improved yield on the bond portfolio. Higher Commission and Exchange Income from increase in business volumes has been partly off-set by lower dividend income on the Bank’s equity investments, resulting in a modest growth of 0.6% in Other Income which stood at BD 24.69 million (US$ 65.66 million). Operating expenses were carefully managed which showed a marginal increase of 2.7%, resulting in the Cost to Income Ratio improving from 33.3% in 2011 to 31.6% in 2012. An amount of BD 9.21 million (US$ 24.49 million) was set aside as specific and general loan loss provision to further strengthen the balance sheet. Additionally, BD 2.56 million (US$ 6.81 million) was provided towards impairment on equity investments due to declining stock market valuations.

The total Balance Sheet of the Bank stood at BD 2,654.56 million (US$ 7,060.00 million) as at 31 December 2012 compared to BD 2,388.65 million (US$ 6,352.79 million) as at the previous year-end. Customers’ deposits at BD 2,077.90 million (US$ 5,526.34) showed a growth of 9.0% reflecting the continued success of our deposit mobilization initiatives. Total Earning Assets stood at BD 2,512.78 million (US$ 6,682.93 million) as at 31 December 2012 compared to BD 2,259.50 million (US$ 6,009.32 million) as at the previous year end, reflecting a growth of 11.2%. Capital Adequacy Ratio remains healthy at 27.9%. The Bank has a well diversified asset composition with strong liquidity.

Based on the above results, the Board of Directors has decided to recommend to the Shareholders’ General Assembly, the following appropriations:

Cash Dividend – 25 % (2011: 30%) BD 21,384,000 (US$ 56,872,340)
Donations and Contributions BD 2,374,962 (US$ 6,316,388)
Transfer to General Reserve BD 12,830,400 (US$ 34,123,404)

 

  

The Board has also proposed to the shareholders a bonus issue of BD 8.55 million at the rate of one additional share for every ten shares held (10%). The bonus share issue is proposed to be made through utilisation of BD 8.55 million from the General Reserve, which is subject to regulatory approvals. Total cash and stock dividend payouts for 2012 amounts to 35%.

Total Shareholders’ Equity before 2012 appropriations stands at BD 318.94 million (US$ 848.24 million). The appropriations to Donations and Contributions will bring the total allocation under the programme to BD 31.78 million (US$ 84.52 million) since its inception in 1980. During the year, the Bank disbursed BD 1.29 million (US$ 3.43 million) for several worthy causes in the Kingdom of Bahrain.

Looking ahead, Mr. Qassim said: “the Bank is well positioned to achieve its strategic business priorities capitalizing on the well established business franchise, strong capital base and adequate liquidity as we emerge from what has been a difficult and challenging period”.

Financial Summary

(millions) 31 December 2012 31 December 2011
  BD US$ BD US$
Net Interest Income 61.92 164.68 55.37 147.26
Other Income 24.69 65.66 24.55 65.29
Total Income 86.61 230.34 79.92 212.55
Total Operating Expenses (27.34) (72.71) (26.61) (70.77)
Total Provisions/impairment (11.77) (31.30) (7.67) (20.40)
Net Income 47.50 126.33 45.64 121.38
Cash Dividend 25 % (2011: 30%) 21.38 56.87 25.66 68.25
         
Loans & Advances

888.25

2,362.37

972.07

2,585.31

Investment Securities 757.83 2,015.50 650.21 1,729.27
Total Earning Assets (Treasury Bills, Bank Placements,
Loans & Advances and Investment securities)
2,512.78 6,682.93 2,259.50 6,009.32
Customers' Deposits 2,077.90 5,526.34 1,905.49 5,067.80
Total Assets 2,654.56 7,060.00 2,388.65 6,352.79
Shareholders’ Equity 318.94 848.24 274.73 730.67
         
Earnings Per Share 55.5 fils 15 cents 53.4 fils 14 cents