The second quarter of 2019 witnessed a significant improvement in the performance of the Group and its banking units as compared to the first quarter of the year due to the growth in financing and investment operations as well as the limited movements of local currencies of our major units against the US dollar. Almost all these units achieved a remarkable growth in their profits during this quarter, which came within our estimated budget for this period. We expect the Group’s results to improve significantly by the end of this year.

In the light of the above factors, the quarterly results for the second quarter of 2019 showed that the total operating income increased by 4% compared to the first quarter, to reach US$ 226 million compared to US$ 255 million for the same period last year, with a decline of 11%. Total net income increased by 31% to US$ 54 million compared to the first quarter of 2019, while it shows a decline of 16% compared to US$ 65 million for the same period last year. Net income attributable to shareholders of the Group increased by 34% to reach US$ 32 million compared to the first quarter of 2019 while it showed a decline of 18% compared to US$ 39 million for the same period last year. All of which are indicative of the significant improvement in the Group’s performance during the second quarter of this year. The Group has reported a US Cents 1.33 for the second quarter of 2019 compared to US Cents 1.91 for the same period last year.

As for the Group’s results for the first half of the year 2019 as a whole, it is still partially affected by the decrease in the Group’s results during the first quarter of the year. Total operating income reached US$ 442 million during the first half of 2019, decreasing by 14% compared to US$ 512 million for the same period in 2018. After deducting operating expenses, provisions and taxes, total net income reached US$ 95 million during the first half of 2019, a decline of 22% compared to US$ 122 million for the same period in the previous year. Net income attributable to the shareholders of the Group was US$ 56 million, a decrease of 24% compared to US$ 74 million for the same period in the previous year. The Group has reported a US Cents 3.27 for the first half of 2019 compared to US Cents 4.75 for the same period last year.

The positive developments that occurred in the second half of the year were reflected positively on the balance sheet items. Therefore, the consolidated balance sheet of the Group reached at US$ 24.2 billion at the end of June 2019, an increase of 2% compared to US$ 23.8 billion at the end of December 2018. The Group maintained a large portion of these assets in the form of liquid assets in order to seize the financing opportunities and to face the fluctuations in the markets.

Operating assets (financing and investments) amounted to US$ 19.0 billion as at the end of June 2019 compared to US$ 17.9 billion at the end of December 2018, increasing by 6%. Customer accounts including due to banks and financial institutions as at the end of June 2019 reached US$ 20.7 billion, an increase of 6% compared to US$ 19.6 billion level as at end of December 2018, and represents 86% of total assets, which indicates not only the continued customer confidence and loyalty in the Group but also a growing customer base.

Total equity reached US$ 2.2 billion at the end of June 2019 compared to US$ 2.3 billion at end of December 2018, decreasing by 4% due to the distribution of cash dividends for 2018 and the effect foreign currency translations.

HE Sheikh Saleh Abdullah Kamel, Chairman of Al Baraka Banking Group said, “The Group’s results for the first half of 2019 indicate a significant improvement in financial and operational performance. All our banking units in 17 countries have continued to deliver good results as a result of their commitment to provide products and services with real social and economic value to their communities. This has earned them the trust and loyalty of customers and further established their presence in their local markets”.

For his part, Mr. Abdulla Ammar Al Saudi, Vice Chairman of ABG, said, “The financial results achieved by the Group and its units in the first half of 2019 confirmed that they have established a strong presence with rich financial, technical and human resources, and extensive experience in their markets. These factors enable them to generate sustainable returns, the size of which was sometimes affected by the geopolitical and financial conditions surrounding them”.

Mr. Adnan Ahmed Yousif, Member of the Board of Directors and President & Chief Executive of Al Baraka Banking Group, said, “Despite the unfavorable geopolitical developments during the first half of 2019, we were able to strongly improve our performance and enhance our good profits and operational positions. We were able also to enhance our precautionary measures in the context of sound policies and strategies developed by the Group and implemented by our units. We are very pleased to see the contribution of the majority of our banking units in the positive results of the Group.”

With regard to the Group’s plans to expand its branch network, the President & Chief Executive stated, “The Group’s units have continued their careful and well-planned expansion programs, where the number of new branches opened by these units has reached 5 branches during the first half of 2019, bringing the total number of branches to 702 at the end of June 2019. The total staff of the Group’s branches reached 12,600, which reflects the clear role of our units towards creating rewarding jobs to citizens in their communities. In addition, this policy is one of main pillars of growth in businesses and profits in the Group.”

In line with our commitment to our new markets, we have held the 27th Strategy Meeting of the Group at our banking unit, BTI Bank in Casablanca, Morocco recently, which was attended by the Chairman of the Group HE Sheikh Saleh Kamel as well as the heads of the Group’s banking units. The Meeting discussed all strategic operational and financial issues of the Group, guided by the Chairman of the Group’s directives to develop its business model in order to achieve greater social and economic value for the communities in which its units operate and to provide new products that meet his aspirations in correcting certain products offered through Islamic banks”.

As a new acknowledgment of the Group’s international standing, the Islamic International Rating Agency (“IIRA”) reaffirmed the international scale credit ratings assigned to Al Baraka Banking Group at BBB+ / A3 (long term / short term) and maintained the Outlook on its assigned ratings at “Stable”. It also raised the Group’s fiduciary score to higher level of “81-85”, the highest among the Islamic Financial Institutions in the region. This reflects the strong fiduciary standards in the Group. The Agency commended the wide geographic diversification of the Group with most jurisdictions possessing a low economic correlation, thereby improving the overall risk metrics. In addition, IIRA commended the stable and cost effective sources of liquidity of the constituent Units of the Group, which is seen as a strength. Besides, the Group’s strong risk management framework as well as robust corporate governance practices are positives for the Group.

In a unique initiative that enhances the close link between the Group’s Sustainability and Social Responsibility Program and the United Nations Sustainable Development Goals 2030, the Group and UN Environment (UNEP) have agreed to collaborate to leverage private finance for environmental projects in Al Baraka network countries. The Group intends to finance environmental projects of over $197 million for 2019- 2020 in various countries where Al Baraka operates. This pledge comes as part of the Al Baraka Sustainable Development Goals (2016-2020). We expect that our collective effort will help reduce carbon emissions in these countries. In addition, we hope that this financing pledge will encourage other banks to similarly finance renewable and energy efficiency projects.

Mr. Yousif added, “During the first half of 2019, we continued to focus on the implementation of our Digital Transformation Strategy at the Group level and the banking units, and we intend to launch a number of initiatives which will highlight the leading role of the Group in embodying this transformation. We also continued to focus on expanding our Shari’a-compliant investment and banking products base through our banking units and creating greater synergy between them in the areas of compliance, AML / CFT, FATCA, CRS, and other international legislation to strengthen the Group’s position. We have also continued to provide modern training programs through Al Baraka Academy and online to all employees of the Group and its banking units”.

The P&CE of ABG concluded his statement by praising the tireless efforts of the Executive Management at the Group Head Office, the executive management teams of the banking units of Al Baraka Banking Group and related parties that were instrumental in achieving these satisfactory results for the Group.

Al Baraka Banking Group B.S.C. (“ABG”) is licensed as an Islamic wholesale bank by the Central Bank of Bahrain and is listed on Bahrain Bourse and NasdaqDubai. It is a leading international Islamic banking group providing its unique services in countries with a population totaling around one billion.

The Group has a wide geographical presence in the form of subsidiary banking units and representative offices in 17 countries, which in turn provide their services through over 700 branches. Al Baraka Banking Group has operations in Jordan, Egypt, Tunis, Bahrain, Sudan, Turkey, South Africa, Algeria, Pakistan, Lebanon, Saudi Arabia, Syria, Morocco and Germany, in addition two branches in Iraq and two representative offices in Indonesia and Libya.

ABG and its Units offer retail, corporate, treasury and investment banking services, strictly in accordance with the principles of the Islamic Shari’a. The authorized capital of ABG is US$ 2.5 billion.

ABG is rated BB (long term) / B (short term) by Standard & Poor’s and BBB+ (long term) / A3 (short term) by Islamic International Rating Agency (IIRA). IIRA has also rated ABG on the national scale at A+ (bh) / A2 (bh) (A+/A2) with a fiduciary score of 81-85, the highest level amongst Islamic Financial Institutions in the region.