Monday 06, November 2017 by Nabilah Annuar

Bank ABC reports $49 million in profit for the third quarter

Bank ABC (Arab Banking Corporation) has announced that its consolidated net profit, attributable to the shareholders of the parent, for the first nine months of 2017 was $151 million.

Bank ABC (Arab Banking Corporation) has announced that its consolidated net profit, attributable to the shareholders of the parent, for the first nine months of 2017 was $151 million.

According to a statement, the bank’s profit saw an increase from $150 million reported in the same period last year. Bank ABC benefited from robust performance in core businesses notwithstanding conditions that continue to be challenging in many markets. Net profit for the third quarter was $49 million, similar to the level reported for the same period last year.

Total operating income was $653 million, marginally lower than the $658 million reported in the first nine months last year. Whilst growth in revenues in Brasil benefited from FX strengthening, our Wholesale and Retail businesses are showing traction from the strategic initiatives resulting in sustained performances even after absorbing some significant FX depreciation. Operating expenses at $339 million were $14 million higher than last year, including continuing investment into the Group’s strategy, digital platform and infrastructure as well as some currency translation impact. Net impairment provisions for the nine-month period ended 30 September 2017 at $67 million compared with the previous year’s $60 million reflecting the increased level of charge from Banco ABC Brasil (BAB) net of recoveries.  BAB’s impairment charge continues to be impacted by the effects of recent recession in Brazil but is lower than Brazilian peer banks, and BAB’s overall profitability has remained strong. Impairment levels in MENA and in the International Wholesale Bank remained at relatively low levels and comparable to previous year.

The Group ratio of non-performing loans to gross loans of 3.9 per cent marginally improved from 2016 year-end levels of 4.1 per cent and normalises to 2.9 per cent, when legacy loans are adjusted for. The tax charge was at $53 million, compared to the charge of $87 million for the same period last year, the variance largely arising from the tax treatment of currency hedges in BAB. Bank ABC Group’s total assets stood at $29.5 billion at the end of first nine months of 2017, comparable to $30.1 billion at the 2016 year-end. The Bank continues to prioritise asset quality and return, whilst maintaining liquidity and capital strength.

Deposits at the end of the period were $21.5 billion higher than the $20.2 billion at 2016 year-end. The Group’s liquidity position continues to be at comfortable levels with the liquid assets to deposits ratio at 61 per cent, lower than the 68 per cent at the year-end 2016 reflecting the increase in the deposits.

Shareholders’ equity at 30 September 2017 stood at $3,927 million after the distribution of 3 per cent dividend to the shareholders earlier in the year. Group consolidated total capital adequacy ratio (CAR) remained strong at 19.3 per cent, comprising predominantly Tier 1 at 18.2 per cent.