The announcement,
by Ithmaar Bank Chairman His Royal Highness Prince Amr Al Faisal, follows the review
and approval of the Board of Directors of the Bank’s consolidated financial
results.
Ithmaar Bank’s
financial results show a net loss attributable to equity holders for the
six-month period ended 30 June 2020 of BD2.03 million, a 196 percent decrease
compared to the net profit of BD2.11 million reported for same period in 2019.
The loss is mainly due to the economic impact of the global Covid-19 pandemic
which included, among others, taking prudent impairment provisions.
Overall, the Bank’s
results show a net profit for the six-month period ended 30 June 2020 of BD0.21
million, a 95 percent decrease compared to the net profit of BD4.10 million
reported for the same period in 2019.
“On behalf of the
Ithmaar Bank Board of Directors, I am pleased to report that, despite the
unprecedented challenges presented by the ongoing global pandemic, the Bank
continues to grow its core Islamic retail banking business,” said HRH Prince
Amr. “This has included further enhancing the Bank’s online presence and its digital
infrastructure, as well as developing new products and services to further
improve its customers’ Islamic banking experience,” he said.
“This sets the
stage for accelerated future growth when markets return to normalcy and,
although the Bank did not report a profit attributable to equity holders for
the period, it did report a net profit for the period and, more importantly, continues
to demonstrate significant resilience to extraordinarily challenging
conditions,” said HRH Prince Amr. “Customer deposits, for example, continue to
grow despite the turbulent economic conditions, a powerful testimony to the
market’s confidence in the Bank,” he said.
Total income for the six-month period ended
30 June 2020 was BD93.25 million, an 18 percent increase compared to the total
income of BD79.19 million reported for the same period in 2019, mainly due to
increases in core income, particularly the Bank’s share of income earned as a Mudarib.
Operating income for the six-month period ended 30 June 2020 was BD50.18 million,
a 24 percent increase compared to the BD40.36 million reported for the same
period in 2019.
Ithmaar Bank’s
total assets remained stable, at BD2.99 billion as at 30 June 2020, a nominal
0.4 percent increase compared to BD2.98 billion as at 31 December 2019.
Total owners’
equity stood at BD61.68 million as at 30 June 2020, a 22 percent decrease
compared to BD79.17 million as at 31 December 2019, resulting mainly from the day-1
modification loss for six months due to deferment of customer instalments to
help the customers overcome the economic impact of the Covid-19 pandemic.
Total
consolidated equity, as at 30 June 2020, is below the minimum BD100 million
required by the Central Bank of Bahrain (CBB) and the Board of Directors are
working on issuing Additional Tier 1 capital (AT1) of up to BD67 million to
strengthen the Bank’s consolidated equity and meet the regulatory requirements.
The Bank is currently in the process of obtaining necessary regulatory approval
for this issue.
Despite challenging
market conditions, the equity of unrestricted investment account holders grew
to BD1.17 billion as at 30 June 2020, a 10.4 percent increase compared to
BD1.06 billion as at 31 December 2019. Customers’ current accounts also grew to
BD595.99 million as at 30 June 2020, a 4 percent increase compared to BD572.47
million as at 31 December 2019.
“The growth in
customer deposits, particularly during these challenging times, reflects
customer confidence in the Bank and reconfirms that efforts to grow closer to
our customer are, indeed, paying off,” said Ithmaar Bank Chief Executive
Officer, Ahmed Abdul Rahim.
“Ithmaar Bank is
determined to become the Islamic retail bank of choice,” said Abdul Rahim. “To
help realise this shared version, we invest tremendous time, money and effort
on continuously enhancing our products and services and on growing closer to
our customers to enhance their banking experience,” he said.
“This is a
commitment we take very seriously, and we continue to invest on it, despite the
challenging market conditions,” said Abdul Rahim. “In
line with our ongoing efforts to encourage customers to bank online for
example, and as part of our award-winning digital transformation strategy, the
Bank has recently launched an all-new mobile application (App). The mobile app,
which was designed from the ground up specifically to enhance customers’ online
banking experience while reducing the need to physically visit a branch, allows
users to instantly open an account directly from their mobile phones. Following
the launch, Bahrain citizens and residents can now securely open an account in
just a few minutes by simply downloading the Ithmaar Bank App – without ever
having to visit a branch,” he said.
In June, despite
the dramatic economic slowdown imposed by the global Covid-19 pandemic, Ithmaar
Bank announced the opening of a new branch in Hamad Town, effectively relocated
the Al Hamalah branch to a new, better and more accessible location with ample
parking facilities.
Earlier in the
year, Ithmaar Bank, in collaboration with MasterCard, launched a new service
that allows Ithmaar Bank customers to transfer money from Bahrain to various
countries around the world almost instantly. The service, called IthmaarSEND, is
provided to customers directly from the Ithmaar Bank eBanking platform and offers
a faster, simpler and more secure way of transferring money abroad from almost
anywhere in the world, through mobile phones, tablets or any other
internet-connected device. The Bank had also earlier announced that customers
can message the Ithmaar Bank Call Centre number 13303030 to request information
through WhatsApp about the Bank’s products and services, as well as make any
other general inquiries.
The Bank’s
unwavering focus on its core retail banking business is building a stable
foundation while setting the stage for continued growth. This, in turn, has
earned the Bank key awards reflecting its ability to stay ahead of the curve
both locally and regionally as well as highlighting the significance of its
digital initiatives.
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