AGM of Al Baraka Banking Group approves payouts and bonus shares of $68.9 million
Al Baraka Banking Group B.S.C (ABG) held its Ordinary and Extra-ordinary General Meetings on 20 March 2017 at Al Baraka headquarters in Bahrain Bay, Kingdom of Bahrain.
Shareholders reviewed at the ordinary general meeting the report submitted by the Board of Directors on the Group's activities, the report of the Shari'ah Supervisory Board and the external auditors’ report for the financial year ended 31 December, 2016. The consolidated financial statements for the financial year ended 31 December 2016 were also reviewed and approved.
The Group's financial results for year 2016 showed an increase of seven per cent in the Group’s total operating income to $1.08 billion, with a nine per cent increase in net operating income to $507 million. This was achieved against the headwind of significant currency devaluations against the US dollar, and therefore understated the true rate of growth. After a six per cent rise in operating expenses, due to investment in expanding our branch network, and increase in provisions, the Group achieved a net income of $268 million. The Group’s assets totalled $23.4 billion at the 2016 year end, showing a slight reduction from the previous year due to the strong US Dollar. However, in terms of the local currencies the Group’s total assets grew by 18 per cent, reflecting continued expansion in its asset base.
The meeting approved the proposed distribution of profits for the financial year ended 31 December 2016 subject to the required official approvals and the transfer of 10 per cent of the net income amounting to $ 15,154,458 to the statutory reserve, the distribution $ 11,396,304 as cash dividend to the shareholders amounting to one US cent for each share equal to one per cent of the par value of the share, and the transfer of $ 124,993,819 to the retained earnings.
The ordinary general meeting approved also the recommendation of the Board of Directors to distribute bonus shares to shareholders, registered as of the date of the meeting, amounting to 1 share for every 20 fully paid up shares (totalling $ 57,460,923 and equal to 5 per cent of the issued and paid up capital) from the retained earnings subject to the required official approvals.
The meeting approved a remuneration of $ 1.5 Million to the Members of the Board of Directors and the recommendation of the Board of Directors to reappoint Ernst and Young as Auditors for the financial year ending 31 December 2017, and to authorise the Board of Directors or its delegate to fix their remuneration.
The meeting then reviewed the Corporate Governance Report pursuant to Central Bank of Bahrain (CBB) regulations, which included the evaluation of the performance of ABG’s board of directors, members of the Board and Board Committees and the attendance of members at Board Meetings for 2016.
The meeting also approved the payment of the shareholders’ Zakat (on the distributable dividends as of 31 December 2016) of 25.78 US Cents for each 1,000 shares, and authorised the ABG management to pay $ 4,021,457 as Zakat on behalf of the shareholders, to be deducted directly from the retained earnings.
The AGM elected the members of the board of directors for a new term of three years after obtaining CBB’s approval. The following members were so elected: Shaikh Saleh Abdullah Kamel, Mr. Abdulla A. Saudi, Mr. Abdullah Saleh Kamel, Mr. Saleh Al Yousef, Mr. Adnan Ahmed Yousif, Mr. Abdul Elah Sabbahi, Mr. Ebrahim Fayez Al Shamsi, Mr. Jamal Bin Ghalaita, Mr. Yousef Ali Fadil Bin Fadil, Dr. Bassem Awadallah, Mr. Mohyedin Saleh Kamel, Mr. Fahad Abdullah A. Al-Rajhi and Mr. Saud Saleh AlSaleh.
The Extraordinary General Meeting (EGM) then was held and it approved the increase of the issued and paid up share capital from $ 1,149,218,451 to $1,206,679,374 by the transfer of $ 57,460,923 to the Share Capital and the issue of bonus shares of 1 share for every 20 fully paid up shares to the shareholders registered as of the date of this meeting. The meeting also approved amendment to the Memorandum and Articles of Association to increase the capital as above and the authorise and empower the Board of Directors or its delegate to take the necessary action to effect the amendments in the Memorandum and Articles of Association and publish information on the increase in the share capital, and the amendment to the Memorandum and Articles of Association.
Then the EGM approved amendments to Article (20) and (22) of the Articles of Association subject to the approval of the CBB regarding the issuance of Investment Sukuk and the subscription in the same. Based on this amendment, the EGM approved the recommendation of the Board of Directors to issue Sukuk amounting up to $ 500 million in one or multiple issuances on the terms and conditions determined by the Executive Management of ABG and authorised the President and Chief Executive to take the necessary procedures to appoint a Global coordinator and Bookrunner and/or any other third parties in this respect, and to take the required steps to launch, the Sukuk, including undertaking the necessary legal procedures and liaising with the relevant regulators and listing authorities, joint lead managers, co-managers and other investors, advisors and third parties. Such Sukuk issuance will be subject to the approval of the CBB. Also, the EGM authorised the Board of Directors or its designated delegate to take all necessary action in connection with the Sukuk issuance, to attest, notarize and publicise the increase in the share capital to effect the required amendments to the Memorandum and Articles of Association.
At the conclusion of the two meetings, the shareholders praised the performance of the Group in year 2016 and the excellent financial results that it achieved, especially that all units of the Group had contributed to the results, which enhances the confidence in the future performance of the Group, based on diversity of products, depth of knowledge and commitment to the highest professional and ethical standards.