Bahrain's Al Baraka Group Q1 profit falls as income from units drop

Net profit for the three months ending March, slipped 28% to $41 million

Al Baraka Banking Group CEO Adnan Yousif says the lender plans to expand in Asia and Africa. Reuters
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Al Baraka Banking Group (ABG), a Sharia-compliant lender in Bahrain, reported a 28 per cent fall in the first-quarter net profit as income from some of its main operations, including Turkey, fell.

Net profit for the three months ending March 31, slipped to $41 million (Dh150.5m), the lender said in a statement to Bahrain Bourse, where its shares trade. Total operating income for the reporting period fell to $216m from $256.6m from a year-earlier. Total operating expenses, however, fell 10.8 per cent to $144m, while total assets during the first three months increased to $24 billion, the lender said.

The first quarter of the year saw a slowdown in the performance of economic activities in some of the countries in which ABG operates, such as Turkey, Algeria, Tunisia and Sudan, for various reasons that affected the volume of business generated by the units in these markets, the lender said.

There was, however, stability in the domestic currencies of these countries against the US dollar, which reflected positively on the asset side of the group’s balance sheet, but its positive effects on the income statement are not yet clear, the lender said.

“We expect these positive effects to emerge in the coming quarters,” it added.

The results of ABG for the first quarter of 2019 are "considered acceptable", taking into account the geopolitical and economic conditions undergone by many countries where the bank operates, said Saleh Kamel, chairman of the ABG.

“Our units were able to achieve these results while maintaining the quality of its assets and the soundness of liquidity.”

However, despite global economic headwinds, ABG is planning to enter new territories by establishing presence in East Asian markets including Indonesia and China. It is also studying expansion in Africa through presence in several countries, including Kenya, Tanzania and Uganda.

"We will announce the details of these projects in due course," said Adnan Yousif, chief executive of the bank.