ABC Islamic Bank has announced that its profit for the nine months to September 2009 was $6.4m. Income for the third quarter was $9.2m versus $10.6m for the previous quarter, due largely to lower rates and prudent trimming of balance sheet asset size.
There was a positive impact of lower rates also on profit payable of $4.6m versus $6.0m in the previous quarter which allowed net margin to stay unchanged at $4.5m.
Staff and operating costs for the third quarter were also unchanged at $1.6m versus the second quarter. The bank did however decide to make conservative provisions for credit losses ending the third quarter at a nominal $175,000 net loss. The provision was made on account of credit exposure in a GCC country.
Shareholders’ equity as at September 2009 stood at $167.8m, compared to $151m at the end of the second quarter, the increase during the quarter coming from improvement in fair values of available-for-sale investments. As a result the Capital Adequacy ratio improved to 20.9% in September 2009 compared to 18.9% in the second quarter and which is well above the required 12% set by the regulator.
ABC Islamic Bank’s total assets stood at $1.26bn in September 2009, compared with $1.37bn at the end of the second quarter.
Commenting on the results, Mr. Naveed Khan, Managing Director, said, “ABC Islamic maintains positive operating results despite conservative provisioning to cover its exposure in the GCC. Meanwhile, the bank’s capitalization continues to provide a healthy platform for future growth.”