Bank of Bahrain & Kuwait (B.S.C.) 3rd Quarter Results (2331D)
26 Oktober 2020 - 3:32PM
UK Regulatory
TIDM93GQ
RNS Number : 2331D
Bank of Bahrain & Kuwait (B.S.C.)
26 October 2020
BBK discloses its financial results for the quarter ended 30(th)
September 2020
BBK (trading code BBKB.BH) announces its financial results for
the nine months ended 30(th) September 2020, including the third
quarter of 2020 . For the third quarter of 2020, the Bank achieved
a net profit attributable to the owners of the Bank of BD 9.9
million compared to BD 15.4 million in the same period of last
year, a decrease of 35.7%. The basic and diluted earnings per share
amounted to 7 fils compared to 12 fils during the corresponding
period of last year.
The global reduction in the interest rates and the negative
economic effects of the COVID-19 pandemic are continuing to
adversely impact most sectors including the banking industry . The
bank's net interest income for the third quarter of the year
dropped by 25.8% to BD 19.6 million from BD 26.4 million in the
corresponding period of last year. Non-interest income (includes
fees and commission income, and other income) dropped by 20.4% from
BD 10.3 million reported for the third quarter of 2019 to BD 8.2
million for the third quarter of the current year, mainly due to
the impact of the concessionary measures taken in response to
COVID-19 to support the domestic business community, as well as new
regulations on capping fees and charges. Moreover, the Bank's share
of profit from associated companies and joint ventures decreased
from BD 1.5 million to a loss of BD 0.3 million, as a result of the
adverse impact of COVID-19 outbreak on the financial performance of
the bank's associated companies. As a result of the Bank's vigorous
measures to optimize operating costs and enhance the effectiveness
of remedial and management of distressed exposures, the bank
effectively managed to decrease the operating costs by 8.6% to BD
14.9 million from the level of BD 16.3 million reported in the
corresponding period last year and to decrease net provision
requirements by 59.0% to BD 2.5 million from BD 6.1 million level
reported in similar period last year due to the conservative
approach followed by the Bank in previous years in building a good
level of provision reserves..
Total comprehensive income attributable to the owners of the
Bank amounted to BD 19.9 million during the third quarter of 2020,
compared to BD 17.9 million during the same period last year,
representing an increase of 11.2%. The increase in total
comprehensive income is attributable to the increase in valuation
of investment securities during the quarter following a robust
rebound in financial markets.
For the nine months ended 30(th) September 2020, the bank
achieved a net profit attributable to the owners of the bank of BD
39.0 million compared to BD 55.5 million in the same period in the
previous year, registering a decrease of 29.7%. The basic and
diluted earnings per share stood at 29 fils at the end of the
period compared to 44 fils for the same period of last year. The
sharp and rapid lowering of global interest rates resulted in a
decrease in net interest income from BD 84.0 million to BD 60.3
million, a decrease of 28.2%. Moreover, the bank's share of profit
from associated companies and joint ventures decreased from BD 6.4
million during the nine months of 2019 to BD 2.2 million for the
current period, representing a decrease of 65.6%. Furthermore,
non-interest income (includes fees and commission income and other
income) dropped from BD 32.4 million to BD 29.0 million, a drop of
10.5%, largely due to the impact of concessionary measures taken in
response to COVID-19 and due to new regulations on capping fees and
charges. Operating expenses registered a decrease of 3.4% to BD
45.6 million compared to BD 47.2 million reported for the same
period of last year . In addition, continuous investment in
remedial management and active management of distressed exposures
resulted in a significant reduction in net provision charges from
BD 19.6 million for the nine months of 2019 to BD 6.8 million
during the current reporting period, witnessing a decrease of
65.3%
Total comprehensive loss attributable to the owners of the bank
for the nine months ended 30(th) September 2020 amounted to BD 27.7
million compared to a total comprehensive income of BD 65.1 million
reported for the corresponding period last year. In addition to the
drop in net profit, the other comprehensive income was negatively
impacted by unrealized valuation losses on the bank's investments
securities due to turmoil in financial markets following the
COVID-19 outbreak.
The total shareholders' equity attributable to the owners of the
Bank stood at BD 455.1 million as of end of September 2020,
compared to BD 543.9 million as of year-end 2019. The drop of 16.3%
is mainly related to negative valuation of investment securities
due to market volatility, dividend payment during the year, and the
impact of concessionary measures taken in response to COVID-19
pandemic to support citizens and companies.
The total assets by the end of September 2020 reached BD 3,704.5
million compared to BD 3,865.0 million reported at the 2019
financial year-end, registering a decrease of 4.2%. This is mainly
due to the decrease in cash and balances with central banks by
39.7% to stand at BD 227.0 million compared to BD 376.4 million as
end of December 2019. Moreover, net loans and advances registered a
decrease of 5.2% to reach BD 1,583.4 million compared to BD 1,670.9
million as end of 2019. Investment securities and deposits and
amounts due from banks and other financial institutions increased
by 5.8% and 11.3% to stand at BD 925.6 million and BD 309.8
million, respectively (at end of 2019: BD 875.0 million and BD
278.3 million). Total customer deposits stood at BD 2,077.1 million
at end of September 2020; compared to BD 2,169.5 million reported
at 2019 year end showing a decrease of 4%. Loans to customer
deposits ratio stood at a comfortable level of 76.2% (December
2019: 77.0%) .
Commenting on the bank's financial results, the Board of
Directors stated, "We extend our sincere appreciation to the
government for its wise leadership and the continuous measures
being taken to contain the COVID-19 pandemic in Bahrain and to
support all parties. In BBK, we are wholly committed to support
such measures, and to support all our customers to surf safely
through such tough times. Moreover, the bank's management is
dynamically reviewing the bank's operations and financial position
in efforts to preserve shareholders value, by adapting to the new
environment and implementing plans aimed at minimizing the adverse
impact of the pandemic.. We are confident that with the Bank's
solid core indicators, together with the support of our
shareholders, loyalty of our customers, and the dedication of the
management team and employees we will overcome this crisis".
Also commenting on the results, Dr. AbdulRahman Saif, BBK's
Group Chief Executive said, "The COVID-19 pandemic resulted in
unprecedented challenges and decline in profitability across
various economic sectors. As a socially responsible financial
institution, our priority during such a difficult time was to
support our communities and our customers to alleviate the negative
impact of the crisis. In addition, the bank has undertaken balance
sheet optimization initiative to enhance efficiency in utilization
of Bank's liquidity and capital as evident from its robust
liquidity and capital measures. The drop in profitability was
anticipated and in line with the trend in the banking industry.
Although the road to economic recovery is expected to be more
lengthy and challenging , we are confident that BBK's solid
business model and its commitment to support all initiatives aimed
at an all-inclusive will continue to provide our shareholders with
attractive value and contribute to the betterment of the societies
in which we operate".
The full set financial statements and the press release are
available on Bahrain Bourse's website.
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