NBB reports record net profit of BD 61 million for 2017

30/01/2018 14:26 AST

For Q4 2017, the bank recorded a net profit of BD 11.58 million compared to BD 12.03 million for the corresponding period in 2017. Earnings per share (EPS) for the year also improved to 48.4 fils for 2017 from 46.3 fils in 2016 reflecting the bank's enhanced performance and continued effective cost management. These results, which were reviewed and approved by the Board of Directors on 29 January 2018, saw the Board recommend a 2017 dividend of 35 per cent-25 per cent cash dividend and 10 per cent stock dividend.

"We are pleased with the strong financial results and record net profit reported by NBB for 2017. Despite challenging economic conditions, the Bank continued to grow and deliver improved returns for shareholders. Strengthened performance and returns were supported by a new strategy, adopted during 2017, which focuses on diversification, both in existing business lines and through the addition of new revenue streams, and wide reaching operational enhancements including digital innovation across the Bank. Having already begun to see the benefits of these efforts in 2017, NBB is well positioned for ongoing sustainable growth, greater profitability and the expansion of the already important role the Bank plays in driving economic development in the Kingdom of Bahrain. As we embark on a new year, I'd like to extend our gratitude to the customers and partners of NBB and thank our management and staff for their continued dedication and hard work," said Farouk Yousuf Khalil Almoayyed, Chairman of NBB.

Key Financial Highlights:

Income and expenses (full year 2017 vs full year 2016):

The Net Interest Income: BD 73.07 million for 2017 compared to BD 65.99 million for 2016. The increase of 10.7 per cent is attributable to growth in earning assets and effective asset liability management resulting in a strong improvement in the net interest margin.

Other income: BD 31.40 million (US$ 83.51 million) for 2017 compared to BD 30.88 million, an increase of 1.7 per cent. Income from core banking activities showed a growth of 14.1 per cent and income from treasury and investment activities increased by 4.9 per cent while 2016 had a one-off income from sale of investments resulting an overall modest increase in total Other Income during 2017.

Total Operating Costs decreased from BD 34.09 million for 2016 to BD 32.99 million resulting in a significant improvement in Cost to Income ratio from 35.2 per cent in 2016 to 31.6 per cent in 2017.

Impairment provision of BD 10.40 million during 2017 due to financial difficulties faced by some borrowers and the resultant inability to meet their obligations.

Balance sheet (31 December 2017 vs 31 December 2016):

Total Earning Assets (comprising of Treasury bills, Bank placements, Loans & Advances, Securities and Investment in Associates): BD 2,939.66 million as at 31 December 2017 compared to BD 2,822.98 million as at 31 December 2016.

The growth in Loans & Advances by 18.9 per cent to reach BD 1,226.85 million (BD 3,262.90 million) during the same period.

Customer Deposits: BD 2,165.21 million as at 31 December 2017 compared to BD 2,088.35 million as at 31 December 2016, an increase of 3.7 per cent.

Strong Capital Adequacy Ratio of 36.3 per cent (before 2017 appropriations). Based on the above results, the Board of Directors has recommended to the Shareholders' General Assembly, the following appropriations: Cash Dividend: 25 per cent (2016: 25 per cent) BD 31.89 million; Donations and Contributions: BD 3.05 million; Transfer to General Reserve: BD 19.13 million.

CPI Financial