Commenting on these results, H.E Sheikh Saleh Abdullah Kamel, Chairman of Al Baraka Banking Group, said “The political and economic tensions continued during the first quarter of 2015 in a number of countries where our units work, which was coincided with continued decline in oil prices on one side and the continued efforts to enhance recovery and growth prospects in developed countries amid fluctuated monetary and financial conditions and regulatory developments on the other hand. All these had impacts on banking environment and it was natural that banks adopted more cautious business strategies. But we nevertheless note with satisfaction that ABG continued to achieve good results, which reflects the Group success in following the sound Islamic banking model and precautionary business strategies that enabled it to deal wisely with these developments and to continue expanding its business”.
For his part, Mr. Abdulla Ammar Al Saudi, Deputy Chairman of ABG, said that “The financial and operational results achieved during the first quarter of 2015 reflect the keenness of the Group to grow steadily and efficiently, despite growing regional and global challenges around us, and growing regulatory, technical and human requirements. We were able to keep pace with all these challenges and requirements, committed to the highest professional and ethical values and principles, and thanks to implementation of wise strategies and programs supported by strong financial means, human resources and technical capabilities possessed by the Group and the long experience of its units in the market where they operate.”
Mr. Adnan Ahmed Yousif, Member of the Board of Directors and President & Chief Executive of Al Baraka Banking Group said “the good results that we achieved during the first quarter of 2015 highlight once more our determination to continue to invest our substantial financial resources and expertise and the wide geographic network of the subsidiary units of the Group in maximizing the returns to our shareholders and the investors in the Group by implementing business strategies that are based on expanding the branch network of our units in 15 countries, improving the quality of our products and services, offering more innovative products, strengthening the relationship with our partners, investors and customers and entering new markets, as well as modernizing and developing the human, operational, regulatory and technical infrastructures at the Group and subsidiary banking units levels”.
We are very pleased to see the contribution of all our banking units in the growth of profits of the Group, which reflects the sound financial positions enjoyed by these units, although the countries of some of them are experiencing political transformations, which clearly influenced the financial and economic activity. Coincided with this, the cooperation between the Group’s units in trade financing activities for MENA countries have increased, which contributed to the emergence of the role of the Group as a key player in promoting trade and investment between these countries.
With regard to the Group’s plans to expand its branch network, the President & Chief Executive said that “following our adding of 70 new branches in 2014 to bring total branches to 549 branches, we intend to open another 54 new branches in 2015, This reflects our determination to consolidate and expand our activities in the countries where we operate currently. Mr. Yousif further said, “It is worth mentioning here that the ambitious branch network expansion programs implemented by the Group would result this year, as it did the last year as well, in huge expenses related to the establishment of these branches and equip them with the necessary human and technical resources. However, the returns of these programs in terms of profits, income, growth and expansion will be great and very positive and will be seen in the forthcoming years”.
Al Baraka Turk Participation Bank, once again this year, succeeded in obtaining US$ 268 million 2-year syndicated Murabaha financing facility. The facility received a strong response from the market with 14 institutions participating from Europe and Mena. Due to the significant oversubscription over the requested amount of US$ 150 million, the Bank decided to increase the facility size to US$268 million. The facility will be utilized by the Bank to broaden and diversify its funding base, develop new bank relationships and strengthen existing ones.
For the third successive year, Al Baraka Banking Group and six of its subsidiary banking units received the “Best Islamic Financial Institution” Award of 2015, as part of the annual awards that the Global Finance magazine, which is specialized in banking and finance, awards to international banks and financial institutions. Al Baraka Banking Group received the “Best Islamic Financial Institution in Middle East / North Africa” Award, Al Baraka Bank Syria received the “Best Islamic Financial Institution in Syria” Award, Jordan Islamic Bank received the “Best Islamic Financial Institution in Jordan” Award, Al Baraka Bank Egypt received the “Best Islamic Financial Institution in Egypt Africa’ Award, Al Baraka Islamic Bank Bahrain received the “Best Islamic Financial Institution in Bahrain” Award, Banque Al Baraka D’Algerie received the “Best Islamic Financial Institution in Algeria” Award and Itqan Capital (Saudi Arabia) received “Best Up-and-Comer” Award.
Also, for the second four of Al Baraka banking Group units won Islamic Finance News Awards 2014 as the Best Islamic Banks in the region through the annual comprehensive referendum conducted by the Foundation of Islamic Finance News. Al Baraka Islamic Bank won the award as the Best Islamic Bank in Bahrain, Al Baraka Bank Lebanon won the award as the Best Islamic Bank in Lebanon and Al Baraka Bank Sudan won the award as the Best Islamic Bank in Sudan. Furthermore, Jordan Islamic Bank won the award as the Best Islamic Bank in Jordan.
The winning of these awards by ABG and its subsidiary banking units for their prominent role in the Islamic banking sector, their ability to achieve consistent growth in the future and meeting professional standards in terms of the quality of products and services offered to clients, as well as for their originality and innovation in services and customer service, continued development and innovation in banking operations and other important criteria such as strategic relationships, geographic reach, profitability and robustness of financial position.
The President & Chief Executive advised that the Group, during the past months, has been working on leveraging the advantages of the unifying the IT network amongst the units and to modernize the institutional, human and technical infrastructure of the Group, by developing the regulations, applications and practices of social responsibility, corporate governance, training, compliance, AML, risk management and FATCA regulations in according with latest international standards.
The President & Chief Executive of the Group added, “We intend to implement many plans and initiatives during 2015. These will include opening new branches, entering new markets, launching new and innovative products and services in our markets, improving the internal operating environment technically and professionally, enhancing the unified culture related to the Group’s corporate identity, increasing inter-unit business amongst Al Baraka Units, as well as enhancing the standing of ABG in the international markets as a whole. We once again stress on our determination to continue to invest our substantial financial resources and expertise and the wide geographic network of the units of the Group towards maximizing the returns for our shareholders and the investors in the Group”.
The President & Chief Executive of ABG concluded his statement by praising the tireless efforts of the executive management at the Group’s Head Office, the executive management teams of the banking units of Al Baraka Banking Group and related parties that were instrumental in achieving these excellent results for the Group.
According to the financial statements of the Group, total operating profit amounted to US$ 238 million in the first quarter of 2015, which is markedly higher by 12% compared to the first quarter of 2014. After deducting all operating expenses which increased by 6%}, the net operating income for the first quarter of 2015 amounted to US$ 101 million, increasing remarkably by 20% compared to the first quarter of 2014. This reflects the noticeable increases in income from core businesses and the success of the Group to diversify its income from fees, commissions and banking services. After deducting taxes and provisions, the net income of the Group reached US$ 69 million for the first quarter 2015, up by 3% compared to the first quarter of 2014 of US$ 67 million. The net income attributable to equity holders of the parent reached US$ 40 million, representing an increase of 9% compared to the same period last year.
Due to the noticeable fluctuations in exchange rates in some of main markets where we operate, the growth rate of the balance sheet items were affected, and therefore the total assets of the Group decreased by 1% to reach US$ 23.1 billion as at the end of March 2015. Without calculating for these effects, the total assets would increase by 6% to US$ 24.8 million compared to the end of 2014. The operating assets (financing and investments) amounted to US$ 17.7 billion as at the end of March 2015 compared to US$ 17.6 billion at the end of December 2014. Customer accounts decreased by 2% from US$ 19.9 billion as at the end of December 2014 to US$ 19.4 billion as at the end of March 2015. Total shareholders’ equity amounted to US$ around 2 billion as at the end of March 2015.
On this occasion, H.E. Sheikh Saleh Abdulla Kamel, Chairman of Al Baraka Banking Group, Mr. Abdulla Ammar Al Saudi, Vice Chairman, Mr. Abdulla Saleh Kamel, Vice Chairman, and Mr. Adnan Ahmed Yousif, President & Chief Executive and all Members of the Board of Directors of ABG expressed their sincere thanks to the Ministry of Industry and Commerce, Central Bank of Bahrain, Bahrain Bourse and Nasdaq Dubai for the cooperation and assistance they extended to the Group since it was established. They also extended their thanks to all the Central Banks in the countries in which Group’s banks operate and to all the investors and customers for their continued support. The Board also thanked all the employees of the Group for their loyalty, hard work and dedication, all of which have contributed to the successes and achievements of the Group.
Al Baraka Banking Group (B.S.C) is licensed as an Islamic wholesale bank by the Central Bank of Bahrain, listed on Bahrain Bourse and Nasdaq Dubai stock exchanges. It is a leading international Islamic banking group providing its unique services in countries with a population totaling around one billion. It is jointly rated BBB+ (long term) / A3 (short term) on the international scale and A+ (bh) (long term) / A2 (bh) (short term) on the national scale with a Stable outlook by Islamic International Rating Agency & Dagong Global Credit Rating Company Limited, and by Standard & Poor’s at BB+ (long term) / B (short term). Al Baraka offers retail, corporate, treasury and investment banking services, strictly in accordance with the principles of the Islamic Shari’a. The authorized capital of Al Baraka is US$ 1.5 billion, while total equity is at about US$ 2 billion.
The Group has a wide geographical presence in the form of subsidiary banking units and representative offices in fifteen countries, which in turn provide their services through over 550 branches. Al Baraka currently has a strong presence in Turkey, Jordan, Egypt, Algeria, Tunisia, Sudan, Bahrain, Pakistan, South Africa, Lebanon, Syria, Iraq and Saudi Arabia, including two representative offices in Indonesia and Libya."