Bank ABC (Arab Banking Corporation) yesterday announced its financial results for Q4 and full year 2023.

The group reported a surge in annual net profit of 53 per cent year on year (YoY) to $235 million on the back of strong core business growth and a stable funding base, combined with interest rate tailwinds and steady cost of credit.

Total operating income reached a record high in the history of the group at $1,279m, a 16pc growth YoY. Balance sheet strength was also maintained, with capital and liquidity ratios at robust levels, while total assets reached $44 billion, crossing the $40bn mark for the first time from a combination of loans, securities and liquid asset growth.

The board of directors have recommended a cash dividend distribution of 30pc of the net profit attributable to the shareholders of the parent or $0.0225 per share or 2.25pc of capital, approximately $70m, a 50pc increase YoY, in line with the group’s profit growth, which will be presented for approval at the bank’s annual general meeting.

During the year, Bank ABC Group also won over 15 awards recognising its excellence and innovation across all business segments, including the prestigious ‘Bank of the Year 2023 for Bahrain’ from The Banker (published by the Financial Times), which has been awarded to Bank ABC for the third time.

Other notable awards included the ‘Best Trade Finance Provider in the Middle East’ from Global Finance, ‘Best Corporate Bank in Bahrain’ from the Euromoney Awards for Excellence, ‘Market Leader in Corporate Banking,’ ‘Market Leader in Digital Solutions’ and ‘Highly Regarded in ESG’ by the Euromoney Market Leaders Awards.

Moreover, its flagship digital-only bank, ila, swept all six awards at the Global Finance World’s Best Digital Awards, including the ‘Best Consumer Digital Bank’ in Bahrain for the third consecutive year.

Bank ABC Group chairman Saddek Omar El Kaber remarked, “The group has posted record revenues and total assets and grew net profits strongly by 53pc year on year. This reflects a strong business model and diversified footprint, capable of leveraging the market opportunities amidst challenges and recovering economic conditions.

“The many awards bestowed on the group, including the prestigious Bank of the Year, Bahrain, reflect Bank ABC’s strong culture and our aspiration to remain relevant as a first bank of choice for our customers.

“The group’s balance sheet remains healthy and robust, with strong capital and liquidity ratios. Our strategy execution is firmly on track and we look forward to continuing this great momentum into 2024 on our strategic journey to build “Mena’s international bank of the future.”

Q4 2023 performance highlights

l Consolidated net profit for Q4 2023 was $52m, 30pc higher compared to $40m reported for the same period last year.

l Earnings per share for the period was $0.01, compared to $0.01 in the same period last year.

l Total comprehensive income was a profit of $84m compared to a profit of $11m, reported for the same period last year.

l Total operating income for Q4 2023 was $336m, 8pc higher compared to $310m reported for the same period last year.

FY 2023 performance highlights

l Consolidated net profit for 2023 was $235m, a growth of 53pc compared to $154m reported last year, driven by a combination of strong core business growth across many markets and effective management of interest rate exposures in a rising interest rate environment.

l Earnings per share for the period was $0.07, compared to $0.05 in the same period last year.

l Total comprehensive income was a positive $258m, compared to a loss of $98m reported in 2022. Last year, the loss arose due to changes in fair valuations of our bond portfolio and net impact of foreign exchange translation in overseas subsidiaries. However, in the current period these reduced significantly on a net basis with the strengthening of the Brazilian real and positive movements in the fair market valuations of our bond portfolio, which offset the impact from depreciation of the Egyptian pound against the US Dollar.

l Total operating income for 2023 was $1,279m, 16pc higher compared to $1,101m reported last year.

Balance Sheet

l Equity attributable to the shareholders of the parent and perpetual instrument holders at the end of the period was $4,300m, compared to $4,095m reported at the 2022 year-end, 5pc higher primarily from incremental profits after dividends paid.

l Total assets stood at $43.9bn at the end of the period, as compared to $36.6bn at the 2022 year-end, an increase of 20pc driven by core business and liquid asset growth, balance sheet optimisation and portfolio management actions.

l Healthy Capital and Liquidity ratios: Tier 1 Capital ratio at 15pc, of which CET1 at 13.5pc. LCR and NSFR at 278pc and 128pc respectively.

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