Bank of Palestine Group announces preliminary net profit of $54 million
Bank of Palestine Group (BOP), announced its FY 2017 preliminary financial consolidated results reporting a gross income of $220,934,607 in 2017, compared with $177,484,615 in 2016, reflecting an increase of 24.48 per cent.
The bank’s Profit before tax is up by 7.33 per cent with $72,983,244 compared with $67,999,090 in 2016, with a net profit achieved of $54,008,928. Total assets grew by 18.53 per cent reaching $4,884,822,851 compared with $4,121,322,946 at the end of 2016. The Bank’s total shareholders' equity reached $449,961,687 with an increase of 11.49 per cent compared with $403,574,797 at the end of 2016. During a meeting of the Board of Directors of Bank of Palestine (BoP), the board announced the holding of its Ordinary and Extraordinary Annual General Assembly Meeting (AGM) on 29 March 2018 in Ramallah, and via video conference in Gaza.
The board recommended to the AGM distribution of $27 million in cash dividends for the bank’s profits in 2017, a percentage of 13.5 per cent of the bank’s paid up capital.
“Despite operating challenges in 2017 in the market place, Bank of Palestine Group maintained a stable organic growth with a conservative approach in order to cushion for future uncertainties. However, we enter the year 2018 with the bank's new organisational structure, which is deemed important for maintaining a modernised banking corporate governance and more focus on operational performance of the bank of Palestine group as a whole. By separating the posts of Chairman and General Manager at the bank coupled with efforts to centralise operations and the appointment of new senior management at group companies, we shall be able to fully utilise the group companies' strengths in order to maximise synergies, economies of scale and core competencies to grow value across all operations,” said Hashim Shawa, Chairman of Bank of Palestine Group.
Other Milestones in 2017 witnessed the Chile Representative Office entering operations in November 2017 a step which has enabled tapping the diaspora potential in the Latin America region and bridging opportunities with the Dubai Representative Office and Palestine head office. The appointment of an independent Board Member nominated by strategic Shareholder IFC with credentials in international finance is timely as bank looks forth for regional and international expansion across diaspora markets and continents. Growth was witnessed in customer deposits, loans, assets with a healthy capital adequacy for the bank at 14.55 per cent. With a Loan to deposit ratio of 66.83 per cent Bank of Palestine continues to have a strong liquidity position for further lending following a diversification and segmentation strategy including retail campaigns.
“As part of Bank of Palestine Group new vision we have a strategic direction for Arab Islamic Bank Subsidiary with an increased capital base to $75 million providing ample adequacy for growth in the Islamic banking operations. We will see the benefits of this expansion strategy in years to come despite short-term increase in expenses and our cost to income ratio. Continued investment in electronic banking channels and digitisation both at the bank and in our Fintech subsidiary Palpay will benefit tremendously with the advent of 3G services first quarter 2018. Al Wasata Brokerage firm has witnessed a capital increase to allow its licence to include asset management and portfolio investment management as well. All of this is projected to be contributing positively to the group's diversified income base,” said Shawa.
Customer deposits reached $3,768,631,970 in 2017, marking an increase of 19.90 per cent compared with $3,143,151,591 at end of 2016. The loan portfolio increased to $2,518,590,540 compared to $2,213,463,765 at the end of 2016 with a growth of 13.79 per cent. In tandem with the growth in the Bank's loan portfolio, the bank is keeping a very acceptable Non-Performing Loan Ratio at around 2.66 per cent while sustaining such stable organic growth.
"Bank of Palestine specific new business model will also enhance the lean efficiency mode of the bank with centralization of operations, cost cutting and operational synergies. Our continued focus on financial and non-financial advisory for financial inclusion of women and youth with a new class of the Mini MBA graduating end of 2017 as a proof point of adhering to the growth strategy that has worked in past years to continue serving more than 50 per cent of the unbanked population of Palestine. Our underway segmentation strategy saw implementation in last quarter 2017 with additional focus on retail business strategy; SME platform in mobile banking that would benefit SMEs, and Customer Relation Managers for corporates and international organisations. Such direction will carry us forth into 2018 despite external operational challenges. We are factoring in a vigilant approach to cushion against some external operational challenges such as new tax imposed on income of operations in Gaza starting from January 2017 and the fact that paid Interest rates have increased dramatically in the local market which affected cost of funds and squeezed Bank's net interest margins. Nevertheless, we have maintained stable growth and are moving forward across all operations prudently,” said Rushdi Ghalayini, General Manager Bank of Palestine.