(MENAFN - Arab News) ABC Islamic Bank yesterday announced a net profit of 8.1 million for 2011, 293 percent higher than last year. Total operating income was 15.1 million compared to 15.9 million for 2010, mainly due to de-risking of balance-sheet asset size.
Operating expenses of 6.2 million were higher than the previous year of 4.9 million, mainly due to a timing recognition of staff expenses related to compensation for last year. Impairment provision of 0.5 million for regional exposure was taken during the year compared to 8.6 million for the previous year. Net profit for the fourth quarter was 1.4 million compared to 1.6 million in the third quarter.
Shareholders' equity at Dec. 31, 2011 stood at 227.7 million, compared to 219.8 million at 2010 year-end. The bank's capital base remains very strong with a capital adequacy ratio of 27.5, predominantly Tier 1, which totaled 26.5 percent. ABC Islamic Bank's total assets declined to 1.035 billion at Dec. 31, 2011 from 1.241 billion at year-end 2010.
Commenting on the results, Naveed Khan, managing director of ABC Islamic Bank said: "Despite our continued effort to deleverage the balance-sheet in order to reduce concentrated exposure and timing adjustments in expense items, the underlying core profitability of the bank has delivered a robust performance in a highly challenging year for the group.
This was made possible due to booking new relationships at higher spreads in target markets and also leading syndicated transactions at attractive fee levels. The broad product range of the bank and its high-quality relationship banking allowed the bank not only to book new relationships in traditional target markets, but more importantly penetrate markets like Turkey by way of arranging syndicated transactions for a select group of Islamic banks with strong linkages to GCC markets.
Looking forward to 2012, we are optimistic. ABC Islamic Bank expects to grow its financing activity selectively, as a result of both its recent drive to win new clients, and a gradual recovery in the borrowing appetite of customers. In addition, the bank intends to intensify its cooperation with ABC Group's expanding Middle East North Africa subsidiaries by rolling out its expertise in Islamic product support for their core customers."