Arab Banking Corporation (ABC) has announced that its consolidated Group net profit for the first quarter of 2014 was $71 million, 27% higher than the profit of $56 million reported in the first quarter of last year. Business volumes grew in line with ABC's expansion plans, resulting in improved revenues across the geographies where ABC operates in. However, currency translation from the stronger dollar resulted in a 2 percent decline in operating income for the quarter to $226 million compared with the first quarter of last year. Operating expenses at $103 million decreased by $10 million resulting in cost/income ratio of 46 percent, a decrease of 3 percent, benefiting from the restructuring initiatives taken last year, besides the impact of currency translation. Recoveries and continued vigilance over asset quality resulted in net impairment provisions of $8 million, sharply lower than the previous year's $28 million which was impacted by some exceptional provisions. ABC Group's total assets stood at $27.9 billion at the end of the first quarter compared to $26.5 billion at 2013 year-end, reflecting growth in loan volumes and other short-term liquid assets. The ratio of NPLs (non-performing loans) to gross loans declined to 2.7 percent from 3.0 percent at year-end 2013. Deposits increased by $1.2 billion during the quarter to reach $19.5 billion supporting ABC's growth strategy. Liquidity continues to be at comfortable levels with liquid assets to deposits ratio at 62 percent. Shareholders' equity at 31 March 2014 stood at $3,897 million following the distribution of 5 percent dividend to the shareholders. ABC Group's capital adequacy ratio at 21.3 percent was substantially above the regulatory minimum (12 percent) and comprised of predominantly Tier 1, which totalled 17.7 percent. ABC's Chairman, Saddek El Kaber, said: “I am pleased with the excellent start to the year following the steadily growing results of the last five years. With continued emphasis on carefully planned expansion I am confident that ABC Group will continue to flourish despite the challenging environments that some of the ABC units operate in.” 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. — SG
