TIDM93GQ
RNS Number : 1497P
Bank of Bahrain & Kuwait (B.S.C.)
15 February 2021
BBK discloses its financial results for the year ended 31st
December 2020
BBK (trading code BBKB.BH) announces its financial results for
the year-ended 31st December 2020, including the fourth quarter of
2020. For the fourth quarter of 2020, the Bank achieved a net
profit attributable to the owners of the Bank of BD 13.0 million
compared to BD 19.9 million achieved during the fourth quarter of
2019, a decrease of 34.7%. The basic and diluted earnings per share
reached to 10 fils compared to 16 fils during the corresponding
period of last year.
Total comprehensive income attributable to the owners of the
Bank during the fourth quarter of 2020 stood at BD 56.6 million
compared to BD 44.2 million last year, with an increase of 28.0%.
The increase in total comprehensive income is attributable to the
increase in valuation of investment securities during the quarter
as financial markets continued to recover from the drop experienced
in the first half of 2020.
Net interest income dropped by 12.0% to BD 20.5 million (BD 23.3
million in the corresponding period of last year), mainly due to
interest rate cuts during early 2020. Net fees and commission
income dropped by 31.9% from BD 9.1 million achieved during the
fourth quarter of 2019 to BD 6.2 million achieved during the fourth
quarter of 2020, 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 regulatory caps on loan fees
that came into effect around mid-2020. Moreover, the Bank's net
share of profit from associated companies and joint ventures
decreased from BD 0.4 million to a loss of BD 2.3 million, as a
result of the adverse impact of COVID-19 on the financial
performance of the Bank's associated companies. During the year,
the bank has taken vigorous measures to optimize operating costs,
which in turn helped to effectively decrease operating costs by
5.6% to BD 15.1 million from BD 16.0 million level reported in the
corresponding period of 2019.
For the full financial year ending 31st December 2020, the Bank
achieved a net profit attributable to the owners of the Bank of BD
52.0 million compared to BD 75.4 million in the year 2019, a
decrease of 31.0%. The basic and diluted earnings per share reached
to 39 fils compared to 56 fils for the previous year.
Total comprehensive income attributable to the owners of the
bank for the year ended 31st December 2020 amounted to BD 28.9
million compared to BD 109.3 million reported in 2019, representing
a decrease of 73.6%, driven by the decrease in valuation of
investment securities due to COVID-19 impact on financial markets
and lower net profit.
The deep cuts of global interest rates by central banks around
the world resulted in a drop in net interest income from BD 107.3
million to BD 80.8 million, a decrease of 24.7%. Furthermore, net
fees and commission income dropped from BD 26.6 million to BD 19.6
million, a drop of 26.3%, mainly due to the impact of concessionary
measures taken in response to COVID-19 and due to the application
of the new regulations on capping fees and charges. Moreover, the
Bank's share of profit from associated companies and joint ventures
decreased from BD 6.8 million during 2019 to a loss of BD 0.1
million during 2020 . Operating costs registered a decrease of 4.0%
to BD 60.7 million compared to BD 63.2 million reported last year.
In addition, continuous investment in boosting the bank's
management of credit risk, active management of distressed
exposures and step-up in remedial efforts resulted in a significant
reduction in net provision charges from BD 18.9 million during 2019
to BD 5.6 million during 2020, a decrease of 70.4%.
Total shareholders' equity (excluding non-controlling interests)
as of end of December 2020 stood at BD 511.8 million compared to BD
543.9 million as of end of the financial year 2019. The decrease of
5.9% 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 Bahraini citizens and companies.
Total assets stood at BD 3,760.4 million at end of 2020 compared
to BD 3,865.0 million reported at end of 2019, registering a
decrease of 2.7%. The investment securities portfolio registered a
healthy increase of 9.4% to stand at BD 957.3 million compared to
BD 875.0 million as of end of December 2019. Cash and balances at
central banks registered a decrease of 31.9% from BD 376.4 million
as of end of December 2019 to BD 256.5 million as of end of
December 2020. Net loans and advances decreased by 6.9% to stand at
BD 1,555.8 million (2019: BD 1,670.9 million). Customer deposits
portfolio maintained its levels of around BD 2,167.4 million (2019:
BD 2,169.5 million). The loans to customer deposits ratio remains
at a comfortable level of 71.8% (2019: 77.0%).
Based on the positive financial results for the year, BBK Board
of Directors recommended paying annual cash dividends of 20 fils
per share and stock dividends of 10% per share equivalent to 1
share for every 10 shares for the shareholders registered with the
bank on the record date and subject to the approval of the AGM and
the regulatory authorities.
Commenting on the financial results, the Board of Directors
stated "We would like to express our gratitude and appreciation to
the governments of the Kingdom of Bahrain and the State of Kuwait
for their wise leadership, direction and for the effective measures
enacted to contain the COVID-19 pandemic and to support all
parties. In BBK, we are committed to support such measures, and we
are immensely proud of the role that BBK has played in maintaining
services throughout the COVID-19 crisis without interruptions,
whilst simultaneously prioritizing the health and well-being of our
employees and customers. The impact of the global pandemic is
reflected in BBK's financial results, which we view as satisfactory
given market conditions. Despite all the challenges and the drop in
profitability across the banking sector, there were positive
outcomes to the pandemic. The crisis has led the Bank to accelerate
the implementation of its 2019-21 digitization strategy, by
fast-tracking several technology projects to 2020, rather than
2021-2022, including the development and launch of BBKPlus mobile
onboarding application. Other strategic initiatives during 2020
included the signing of a memorandum of understanding for BBK's
potential acquisition of specific assets of Ithmaar Holding BSC.
The acquisition is subject to shareholder and regulatory approvals
and completion of due diligence by both parties."
Also commenting on the results, Dr. AbdulRahman Saif, BBK's
Group Chief Executive said, "Despite the unprecedented challenges
of 2020, we continued to deliver value to our customers and
shareholders, support and develop our people, and enrich the
societies in which we operate. A major accomplishment in 2020 has
been our digitalization strategy, by which the pandemic has helped
in accelerating the delivery of our products to meet our customers'
demands for digital services. Our new digital branch in City
Center, featuring a range of self-service technologies, has
received excellent feedback and we plan to open two more in 2021 to
serve our clients. Other digital achievements include the launch of
BBK BanKey, a platform offering various solutions for business and
institutional clients, and the launch of our BBKPlus mobile
onboarding app in addition to BBK mobile app that offers open
banking services. All these achievements were made while extending
support to our corporate and retail customers to enable them
weather the impact of the pandemic. The support included loan
repayment deferrals, interest waivers, discounted fees, and others
including the support to individuals and business entities most
affected by the pandemic. BBK's management team extends its
gratitude to our government for its generous support, wise
leadership and management of the crisis and the effective measures
it introduced.
BBK's unwavering commitment to the highest quality service
standards has resulted in the bank winning prestigious awards,
including the Best Customer Service Bank (Bahrain) Award from
Global Business Outlook, and the Elite JP Morgan Quality
Recognition Award".
The full set of the financial statements and the press release
are available on Bahrain Bourse's website .
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END
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