National Bank of Bahrain B.S.C. reports a net profit of BHD 29.1 million attributable to the owners of the bank for the six months ended 30 June 2020
National Bank of Bahrain B.S.C. (NBB) has reported a 27.3% decrease in its net profit attributable to equity shareholders to BHD 29.1 million (USD 77.2 million) for the first half ended 30 June 2020, compared to BHD 40.0 million (USD 106.1 million) in 2019. The decrease in net profit was predominantly attributable to the worldwide COVID-19 pandemic resulting in higher precautionary provisioning requirements, lower margins, lower income from associate equity valuations and lower dividends following reduced distributions due to the ongoing epidemic.
Basic and diluted earnings per share during the year decreased by 29.2% to 17 fils (USD 5 cents) compared with 24 fils (USD 6 cents) in 2019.
Operating income rose by 16.8% y-o-y to BHD 74.5 million (USD 197.6 million) compared with BHD 63.8 million (USD 169.2 million) in the prior year period. Operating profit at BHD 39.0 million (USD 103.4 million) was down by 7.8% y-o-y, demonstrating the resilience of NBB’s core activities during the COVID-19 pandemic.
Total comprehensive income attributable to NBB’s equity shareholders for the period decreased by 96.0% to BHD 1.8 million (USD 4.8 million) compared with BHD 44.5 million (USD 118.0 million) in 2019, other comprehensive income includes the mark-to-market movements during a year and hence include temporary fair value fluctuations on the Sovereign bond and equity portfolios.
The Group’s total equity attributable to owners decreased by 10.8% to BHD 474.9 million (USD 1,259.7 million) compared with BHD 532.3 million (USD 1,415.7 million) as of 31 December 2019. The decrease was due to the 2019 cash dividend payout, the reduction in the mark-to-market on investment securities classified as fair value through other comprehensive income as well as due to absorbing the cost of deferring loan repayments since March in relation to supporting customers during the first 6 months of the pandemic.
The Group’s total assets increased by 39.3% to BHD 4,450.3 million (USD 11,804.5 million) compared to BHD 3,194.5 million (USD 8,496.0 million) recorded on 31 December 2019. The increase was attributable to the consolidation of Bahrain Islamic Bank B.S.C. (“BISB”) following the acquisition in January 2020 as well as strong demand for NBB loan products during the first 6 months of 2020.
Commenting on the financial results, Mr. Farouk Yousuf Khalil Al Moayyed, Chairman of NBB said, “Our overall financial results for the first half of the year demonstrate our strong position despite the effects of the pandemic on the socio-economic landscape. The NBB Group witnessed a strong first quarter following the acquisition of majority stake in BISB, a strategic move that will result in synergies and a stronger positioning for both banks through enhanced revenue, and shared costs relating to new technology enhancements. In the second quarter, the Group results witnessed a drop, which was expected considering the impact of the pandemic on the market and economy. The overall postponement of economic activity across the GCC also forced us to postpone investment opportunities. Yet, despite the challenging market conditions, our balance sheet and ratios have remained above the required levels and will continue to shield the Group whilst measures are kept in place for business continuity. Despite these times, NBB continued its commitment to support its individual and business customers during these uncertain times to enable the economy to rebound when the pandemic measures are lifted I am proud to say that the NBB Group has stood resilient and we will continue to push ahead with our transformation plans to reach new levels of banking excellence.”
Jean-Christophe Durand, Chief Executive Officer of NBB, added, “The Group’s financial performance during the first half of the year has been impacted by the unstable market conditions witnessed, not only across the Kingdom, but also the world. The drop in market rates and the Group’s precautionary forward-looking provisioning were two major factors contributing to the performance drop. However, the Group continued to show solid growth in operating income, recording a 16.8% increase. NBB was also able to demonstrate volume growth on a standalone basis, which was further enhanced by the BISB consolidation and synergies. Its liquidity and equity position also remain solid and strong, and has withstood the recent volatilities. NBB was also able to extend assistance to its customers during these unusual times, in line with our brand promise of staying close to our customers’ needs. As the nation’s bank, we made it our mission to help stimulate the Kingdom’s economy through various initiatives; be it through loan deferments for individuals and small companies, or actively offering restructuring to SMEs post the deferral period. In the same spirit, we actively contributed to the national ‘Feena Khair’ fund and to the Capital Governorate’s ‘Together We Care’ campaign which benefited 4,000 migrant workers through food provision and sustenance supplies. Furthermore, no effort was spared to protect the health and safety of our staff and customers, and a number of proactive measures were put in place to ensure their wellbeing while maintaining business continuity. This has been a challenging period for every company and individual and we are proud of what we have accomplished which come as a result of our commitment to the nation and to customer excellence. Finally, I would also like to congratulate NBB’s Board and staff on the milestone achieved in 2020, where NBB was named as ‘The Middle East’s Best Bank Transformation’ and ‘Bahrain’s Best Bank’ by the Euromoney Awards for Excellence 2020.”
We would like to inform our shareholders that the full set of audited consolidated financial statements and the press release are available on the Bahrain Bourse website.
National Bank of Bahrain B.S.C. shares are traded on Bahrain Bourse under the trading code: NBB.