Bank of Sharjah net profit up 9%

(MENAFN- Khaleej Times) The Bank of Sharjah announced on Thursday a nine per cent rise in net profit for 2012 as it posted a surge in total assets led by a growth in customer deposits. The bank said it continued to enhance its balance sheet structure and improve its profitability with total assets increasing by nine per cent. The growth in total assets was led by customer deposits, which increased by 10 per cent. Net income for the year reached Dh277 million, up nine per cent compared to the corresponding 2011 figure. The bank's total assets reached Dh22.859 billion from Dh20.934 billion in 2011. Varouj Nerguizian, the bank's Executive Director and General Manager, said the results affirmed the solid structure of the bank's balance sheet. "The bank's ample liquidity in addition to its expansion strategy will competitively position the bank and allow it to take full advantage of the positive developments in the economical scene of the UAE." He said while profitability improved by 13 per cent it remained subdued by across the board application of new regulatory guidelines geared more towards retail activity than the corporate model of the bank. "The real potential of Bank of Sharjah will be revealed by a number of positive developments in strategic investments during 2013-2014." The bank continued to grow its deposit base which reached Dh16.476 billion as of 31 December, 2012, 10 per cent over the 31 December 2011 figure of Dh14.940 billion. Loans and advances reached Dh2.473 billion, four per cent above the December 31, 2011 figure of Dh12.039 billion. The bank said a continued increase in deposits over loans and advances has enhanced the loans-to-deposits ratio which further improved during the year to 0.76 in December 2012 from 0.81 in December 2011.This led to the 26 per cent surge in net liquidity which reached Dh6 billion by the end of 2012 compared to Dh4.8 billion at the end of 2011. "A six per cent decline in net interest income was mainly driven by the 10 per cent increase in deposits, in addition to the excess liquidity which is placed at extremely low interbank interest rates. An 11 per cent increase in non interest income was driven by the improvement witnessed in the financial markets during the last quarter of the year," the bank said in a statement. The collective impairment provision for the 2012 year has declined against a backdrop of an improved economic environment and the overall performance of the credit portfolio. During the year, the bank has set aside Dh115 million of such provisions, raising the bank's cumulative balance of collective impairment provision to Dh58 million. "All the above, led to the nine per cent increase in the current year net profit to reach Dh277 million versus Dh254 million for the year ending December 31, 2011. As a result, earnings per share for the year gained 20 per cent and reached 13.5 fils compared to 11.2 fils in 2011." The bank said total comprehensive income grew by 13 per cent to reach Dh273 million versus Dh242 in 2011 on the back of the improvement in the financial markets.