28 May 2017   
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 NBB Financial Results for the Year 2016

Mr. Farouk Almoayyed Mr. Abdul Razak Abdulla Al Qassim

  • Net Profit of BD 58.24 million (US$ 154.88 million)
  • Dividend of 35% (25% cash & 10% stock) proposed [2015: 25% cash & 10% stock]

National Bank of Bahrain achieved a Net Profit of BD 58.24 million (US$ 154.88 million) in 2016, compared to BD 55.26 million (US$ 146.97 million) in 2015, an increase of 5.4%. For the fourth quarter of 2016, the Bank recorded a Net Profit of BD 12.03 million (US$ 31.99 million) compared to BD 11.90 million (US$ 31.65 million) for the corresponding period of the previous year. The full year Earnings Per Share (EPS) improved from 48.5 fils in 2015 to 50.9 fils in 2016.

At the Board of Directors meeting held on 30 January 2017, chaired by the Bank’s Chairman, Mr. Farouk Yousuf Khalil Almoayyed, the Board reviewed and approved the Bank’s financial results for the year 2016.

Expressing his satisfaction on the performance, the Bank’s Chairman Mr. Farouk Yousuf Khalil Almoayyed said “These reflect the results of our continued focus on improving the Bank’s performance and enhance shareholders returns despite difficult external conditions”. Mr. Almoayyed thanked the Bank’s clients for their valued business relationship and the confidence reposed by them in the Bank and also appreciated the efforts of the executive management and the staff members for their dedicated service, commitment and all round efforts.

Mr. Jean-Christophe Durand, the Bank’s Chief Executive Officer said: “We are pleased to report a Net Profit of BD 58.24 million (US$ 154.88 million) for the year 2016, an increase of 5.4% over the previous year. The results for 2016 are the outcome of the Bank’s focus on generating revenue through efficient balance sheet management while prudentially managing risks amidst challenging business conditions”.

Net Interest Income for 2016 was BD 65.99 million (US$ 175.51 million) compared to BD 59.52 million (US$ 158.30 million) for 2015, a strong growth of 10.9%. The increase is attributable to growth in average loans and advances and better return on deployment of surplus funds. Total Other Income recorded for 2016 was BD 30.88 million (US$ 82.14 million) compared to BD 34.88 million (US$ 92.77 million) for the previous year. The decrease is mainly attributable to capital gain on sale of certain fixed rate investments in the previous year which was not available during 2016 due to prevalent market conditions, lower share of profit from associates and lower fee income from lending operations.

Operating Expenses at BD 34.09 million (US$ 90.70 million) showed an increase of 13.3 per cent over the previous year, reflecting a Cost to Income Ratio of 35.2%. The increase in Staff and Other Expenses is a result of investment made in human resources and technology in line with the Bank’s business strategy to meet customer expectations. As a result of prudent risk management, the impairment provision on Loans and Advances amounted to BD 2.08 million (US$ 5.53 million) for the year 2016 compared to BD 7.74 million (US$ 20.59 million) for the previous year. A charge of BD 2.46 million (US$ 6.54 million) was made in 2016 towards impairment on equity investments due to decrease in the market value of the investments.

The total Balance Sheet of the Bank stood at BD 2,977.10 million (US$ 7,917.83 million) as at 31 December 2016 compared to BD 2,999.71 million (US$ 7,977.94 million) as at the previous year-end. Total Earning Assets stood at BD 2,822.98 million (US$ 7,507.92 million) as at 31 December 2016 compared to BD 2,837.94 million (US$ 7,547.69 million) as at 31 December 2015. The Bank has a well-diversified asset composition with strong liquidity. Customers’ deposits stood at BD 2,088.35 million (US$ 5,554.12) as at 31 December 2016 compared to BD 2,247.02 million (US$ 5,976.13) as at 31 December 2015. Capital Adequacy Ratio remains strong at 35.4 % as at 31 December 2016 before the proposed appropriations.

Based on the above results, the Board of Directors has decided to recommend to the Shareholders’ General Assembly, the following appropriations:

Cash Dividend: 25 % (2015: 25%) BD 28.99 million (US$ 77.10 million)
Donations and Contributions BD 2.91 million (US$ 7.74 million)
Transfer to General Reserve BD 17.39 million (US$ 46.25 million)

The Board has also proposed to the shareholders a bonus issue of BD 11.60 million at the rate of one additional share for every ten shares held (10 %). The bonus share issue is proposed to be made through utilisation of BD 11.60 million from the General Reserve, which is subject to regulatory approvals. Total cash and stock dividend pay outs for 2016 amounts to 35%.

Total Shareholders’ Equity before 2016 appropriations stands at BD 414.70 million (US$ 1,102.92 million). The appropriations to Donations and Contributions will bring the total allocation under the programme to BD 42.68 million (US$ 113.51 million) since its inception in 1980. During the year, the Bank disbursed BD 1.50 million (US$ 3.99 million) for several worthy causes in the Kingdom of Bahrain.

Looking ahead, Mr. Durand said “2017 will offer challenges as regional economies grapple with the level of oil prices and banks come to grips with regulatory constraints and newer norms for doing business. However, there are signs that Bahrain’s focus on infrastructure development and implementation of several projects of national importance will largely mitigate the negative effects of a weak global and regional economic outlook. We are confident that NBB will be able to take advantage of these plans with our concerted effort on innovative and novel approach to existing as well as new business enterprises. Our strong capital base, adequate liquidity, the largest distribution network will provide the fillip to pursue our growth objectives through active deployment in the local economy and also through a concentrated focus on garnering new clients and business activities. We are certain that with our renewed focus and distinctive approach, we will continue to meet the expectations of our customers, both existing and new, while reassuring our shareholders of sustained progress in the years ahead”.

 

Financial Summary (Millions) 31 December 2016

31 December 2015


BD

US$

BD

US$
Net Interest Income

65.99

175.51

59.52

158.30

Other Income

30.88

82.14

34.88

92.77

Total Income

96.87

257.65

94.40

251.07

Total Operating Expenses

(34.09)

(90.70)

(30.10)

(80.05)

Total Provisions/impairment

(4.54)

(12.07)

(9.04)

(24.05)

Net Income

58.24

154.88

55.26

146.97

Cash Dividend 25% (2015: 25%)

28.99

77.10

26.35

70.08

Earnings per share

40.4 fils

10.7 cents

38.0 fils

10.1cents

Annualised return on average equity

16.6 %

16.6 %

15.5 %

15.5 %

         
Loans & Advances

1,031.93

2,744.48

1,051.72

2,797.11

Investment Securities

1,092.92

2,906.71

1,094.04

2,909.68

Total Earning Assets
(Treasury Bills, Bank Placements, Loans & Advances,
Investment securities & Investment in Associates)

2,822.98

7,507.92

2,837.94

7,547.69

Customers' Deposits

2,088.35

5,554.12

2,247.02

5,976.13

Total Assets

2,977.10

7,917.83

2,999.71

7,977.94

Shareholders’ Equity

414.70

1,102.92

364.76

970.11

Earnings Per Share

50.9 fils

14 cents

48.5 fils

13 cents

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