|Arab Banking Corporation: $506m profit for H1 2004 - Cash from massive subsidiary sell-off|
|Arab Banking Corporation (ABC), the parent company of the Arab Banking Group headquartered in Bahrain, announced on Tuesday its consolidated financial results for the first half of 2004 with a net profit of $506 million.
The bulk of the profit - $455 million - was realized from a massive sell-off of ABC's subsidiaries: International Bank of Asia Limited, Hong Kong, and Banco Atlantico S.A., Spain.
The net profit for the same period last year amounted to $96 million, including $30 million from the above mentioned subsidiaries.
At its meeting held on July 26 2004, ABC's Board of Directors authorized an interim dividend of $300 million to shareholders. This will be effected in part by a cash dividend of $2.40 per share ($226 million) and in part by the issuance of approximately 0.062 share for each share out of ABC's treasury stock of 5,867,736 shares ($74 million). The record date for entitlement to the interim dividend will be Sept. 2, 2004.
Operating profit from continuing operations amounted to $51 million, compared with $66 million in 2003. Net interest income declined to $70 million, compared with a 2003 figure of $83 million, depressed primarily by the continuing low interest rate environment. Non-interest income was lower at $85 million from $109 million a year earlier. For the purposes of comparison, last year's figures have been restated to exclude the impact of International Bank of Asia and Banco Atlantico.
ABC Group's total assets amounted to $13.9 billion (2003 year end: $30.0 billion), the reduction being due to the disposal of International Bank of Asia and Banco Atlantico. Liquidity has strengthened substantially, boosted by the sale proceeds with the liquid assets to deposits ratio rising to 80 percent from 51 percent in 2003. The Group continues to maintain a strong capital base as evidenced by the risk asset ratio of 29.95 percent at June 2004, compared with the ratio of 15.1 percent at the year end 2003, calculated in accordance with the requirements of the Bahrain Monetary Agency.
Ghazi M. Abdul-Jawad, President & Chief Executive said: "Concurrent with the process of arranging the disposals of International Bank of Asia and Banco Atlantico, earlier this year the ABC Group began to reposition its assets, enhance its development of activities within the Arab region and complete structural changes within the group to reduce expenses. These structural changes and expense controls brought in recently are beginning to show their impact on ABC's expense base, reducing current overheads."
Beirut,08 30 2004
The Daily Star