NBB sets sights on new levels of excellence

MANAMA: National Bank of Bahrain (NBB) has reported a 12.5 per cent decrease in net profit at BD14 million ($37.1m) for the third quarter this year, compared with BD16m ($42.4m) in the same period of 2019.

The decrease in net profit was predominantly due to the Covid-19 pandemic resulting in higher precautionary provisioning requirement.

Basic and diluted earnings per share for the quarter ending September 30, decreased by 11.1pc to 8 fils compared with 9 fils in the same period of 2019.

Operating income increased by 20.8pc in the quarter to BD33.7m compared with BD27.9m in the prior year period.

Operating profit at BD16.6m was in line with the prior year level of BD16.8m, demonstrating the resilience of NBB’s core activities during the Covid-19 pandemic.

Total comprehensive income decreased by 14.1pc to BD16.4m compared with BD19.1m in 2019.

The reduction is attributable to the decline in the net profit following the increased precautionary provisions.

For the nine months ending September 30, NBB has reported a 23pc decrease in net profit at BD43.1m, compared with BD56m in 2019.

Creation of precautionary provisions, lower margins, lower income from associate equity valuations and lower received dividends were all factors impacting the net profit.

Basic and diluted earnings per share during the period decreased by 24.2pc to 25 fils compared with 33 fils in 2019.

Operating income increased by 18pc year-on-year (YoY) to BD108.2m compared with BD91.7m in the prior year period.

Operating profit at BD56m was down by 5.2pc from the 2019 level of BHD 59.1m.

Total comprehensive income for the period decreased by 71.4pc to BD18.2m compared with BD63.6m in 2019.

Other comprehensive income includes the mark-to-market movements during a year and hence include temporary fair value fluctuations on the Bahrain Sovereign bond and equity portfolios.

The group’s total equity decreased by 8.1pc to BD489.2m compared with BD532.3m recorded as of end-December 2019.

The decrease was due to the 2019 cash dividend payout, the reduction in the mark-to-market on Bahrain sovereign securities classified as fair value through other comprehensive income as well as due to absorbing the cost of deferring loan repayments since March in relation to supporting customers during the first six months of the pandemic.

The group’s total assets increased by 32.1pc to BD4,219.4m compared to BD3,194.5m as of end-December 2019.

Demand

The increase was attributable to the consolidation of Bahrain Islamic Bank following the acquisition in January 2020 as well as strong demand for NBB loan products during the first nine months of 2020.

NBB chairman Farouk Almoayyed said, “We are very pleased with our overall financial results for the third quarter of the year, which demonstrate positive growth despite the effects of the pandemic on the global economic environment.

“The NBB Group witnessed a strong first quarter following the acquisition of majority stake in BISB, a strategic move that will result in synergies and a stronger positioning for both banks through enhanced revenue and shared costs relating to new technology enhancements.

“We did see some drop in the group’s results during the second and third quarters of 2020 which is expected, considering the impact of the pandemic on the economy, which affected our margins.

“The temporary suspension of economic activity across the GCC also forced us to postpone investment opportunities in the region.

“But, despite the challenging market conditions, our balance sheets and ratios have remained robust and will continue to safe-guard the group whilst measures are kept in place for business continuity.

“The NBB Group has had a strong year thus far and exceeded expectations, and we will continue to move forward with our growth plans to reach new levels of banking excellence.”

NBB chief executive Jean-Christophe Durand said, “The group’s financial performance during the third quarter of the year has been positive despite the unstable market conditions. These results come despite the drop in market rates which have had a significant impact on profit growth and margins. Our strong positioning in the market enabled us to provide enhanced assistance to our customers during these unusual times.

“As the nation’s bank, we made it our mission to help stimulate the kingdom’s economy through various initiatives; be it through further loan and mortgage payment deferments for individuals and small companies, in line with CBB directives, or actively offering restructuring to SMEs post the six-month deferral period.

“This has been a challenging period for every company and individual and we are proud of what we have accomplished which come as a result of our commitment to the nation, to our people and to customer excellence.”

 

Source: http://www.gdnonline.com/Details/885949/NBB-sets-sights-on-new-levels-of-excellence

 

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