Al Baraka Banking Group (ABG), a Bahrain-based Sharia-compliant lender, reported a 28 per cent fall in the first-quarter net profit as income from some of its main markets of operation, including Turkey, fell.
Net profit for the three months ending March 31, slipped to $41 million (Dh150.5m), the lender said in a statement to Bahrain Bourse, where its shares trade. Total operating income for the reporting period fell to $216m from $256.6m from a year-earlier. Total operating expenses, however, fell 10.8 per cent to $144, while total assets during the first three months increased to $24 billion, the lender said.
The first quarter of 2019 saw a slowdown in the performance of economic activities in some of the main markets in which ABG operates, such as Turkey, Algeria, Tunisia and Sudan, for various reasons, which affected the volume of business generated by the group's units in these markets, the lender said.
There was, however, stability in the domestic currencies of these countries against the US dollar, which reflected positively on the asset side of the group’s balance sheet, but its positive effects on the income statement are not yet clear, the lender noted.
“We expect these positive effects to emerge in the coming quarters,” it added.
The results of ABG for the first quarter of 2019 are “considered acceptable”, taking into account the geopolitical and economic conditions undergone by many countries where the bank operates, said Saleh Abdullah Kamel, chairman of the ABG.
“Our [business] units were able to achieve these results while ... maintaining the quality of its assets and the soundness of liquidity.”
However, despite global economic headwinds, ABG is planning to enter new territories by establishing presence in East Asian markets including Indonesia and China. It is also studying the expansion in Africa through presence in several countries, including Kenya, Tanzania and Uganda.
“We will announce the details of these projects in due course,” said Adnan Ahmed Yousif, chief executive of the bank.
