BANK ABC (Arab Banking Corporation B.S.C.) announced Tuesday that its consolidated group net profit, attributable to the shareholders of the parent, for the first half of 2016 was $101 million, 5% higher compared to a profit of $96 million reported for the same period last year. Net profit for the second quarter was $60 million, 36% higher than $44 million reported for the same period last year. Bank ABC achieved growth in both total revenues and net profit on the back of a strong performance from virtually all the businesses in the half year. More positively, core business volumes continued to grow during the half year, despite the fact that the economic conditions in the Bank's core markets continued to remain challenging, characterized by credit deterioration and FX volatility. The total operating income for the period grew to $442 million, compared with $372 million reported in the first half last year, driven by core income growth and also benefiting from currency movements. Operating expenses at $212 million remained at the same level as last year reflecting a combination of FX weakening and tight cost management measures, but also investing into strategic transformation. Although impairment charges for the period was $36 million, higher than the $22 million reported in the previous year, they were in line with our expectations, given the deterioration in economic conditions. These were also better than the prevailing market experience, attesting to the robust credit quality and credit processes. The ratio of non-performing loans to gross loans slightly increased to 3.8%, compared to 3.4% at 2015 year-end. Tax charge for the six months of 2016 was at $71 million, whilst last year was at $12 million arising from the tax treatment of currency movements in subsidiaries with effective tax rates remaining at similar level. The Bank ABC Group's total assets stood at $30 billion at the end of the first half of 2016, compared to $28 billion at the 2015 year-end, the growth in part attributed to FX impact. The Bank continues to focus on maintaining additional liquidity, while prioritizing asset quality and improving return. Deposits increased by $1.2 billion during the period to reach $19.7 billion. The Group's liquidity position continues to be at comfortable levels with the liquid assets to deposits ratio at 67%, slightly better than the 66% at the year-end 2015. Shareholders' equity at 30 June 2016 stood at $3,834 million after absorbing the foreign exchange movements on investments in subsidiaries and fair value changes on marketable securities. The Bank ABC Group's consolidated total capital adequacy ratio (CAR) remained strong at 18.6%, comprising predominantly Tier 1 at 17.1%. Bank ABC's Group Chairman Saddek Omar El Kaber said "the Q2 results have been encouraging. Faced with continuing stressed economic conditions and uncertainty in some of our key markets, the Bank's core business is showing resilience and ability to adjust. Our momentum is building up across all our strategic initiatives. We remain cautiously optimistic, as our efforts to build a sustainable growth model endure, whilst we continue maneuvering through the external market dynamics". Bank ABC is a leading player in the region's banking industry and provides innovative wholesale financial products and services that include corporate banking, trade finance, project and structured finance, syndications, treasury products and Islamic banking. It also provides retail banking services through its network of retail banks in Jordan, Egypt, Tunisia and Algeria.
