Bank ABC's AGM held

Manama, Mar. 24 (BNA): Bank ABC’s shareholders during the Annual General Meeting (AGM) today approved a cash dividend distribution of 3% amounting to $ 92,934,000. The distribution represented in $ 0.03 per share, net of treasury shares, translating to approximately 46 per cent of the net profit for the year, attributable to the shareholders of the parent. The AGM has also approved the appointment of new directors to replace retiring board members following election or re-election to the Board of Directors for its 13th term. Since the announcement of the intention for a market making arrangement in February 2018, ABC’s share price has risen from $0.28 to $0.44 (as a 31 January), a rise of 50 per cent with over 30 per cent of that gain following announcement of the arrangement on June 20, 2018. The volume of ABC’s share traded in the 12 months period to 31 December 2018 has increased to 54.2 million (+53%) from 35.5 million in similar period 2017. The Operating performance of the bank continued its positive trend during the year 2018, and the first phase of our transformation strategy has met its goals. This was achieved despite slowing global economic growth and persisting geopolitical tensions. "In our core markets, recovery in the GCC remains muted and the outlook in North Africa continues to be challenging. But conditions in Brazil, another key market for us, are improving," Dr. Khaled Kawan ABC Group's CEO, said. Bank ABC’s net profit for 2018 was $ 202 million, 5 per cent higher than in 2017, thus continuing the past few years’ improving operating performance. The Bank is prioritising a more efficient use of capital and growing fee income, which caused return on equity to uptick, increasing to 5.2 per cent in the year. Total operating income was $ 817 million beside $ 869 million reported for 2017 but normalises also to $ 866 vs $ 868 million respectively, after adjusting for effects of foreign currency hedging transactions in Banco ABC Brasil (BAB) which have an offsetting tax charge impact, and also being somewhat reduced by FX depreciation of the Brazilian Real (“BRL”) against USD in particular. "As I said earlier in the meeting that 2018 was a difficult year but not bad, in the sense of we did not had bad surprises, performance was modest and not perfect, but there was an improvement," Dr. Kawan added. After the bank's investments in building presence in Dubai and Singapore, the operating costs were $ 474 million ($ 12 million higher than in 2017). Impairment charges for 2018 were $ 79 million, down from $ 96 million in 2017, reflecting prudent lending criteria and proactive management of remedial, which helped the bank contain it credit cost. "I would say the VAT had a marginal effect on the bank, we have projects running for the last 6-7 months and the bank has lots of services, and acquisitions, we are ready to cover large percentage, and we don’t see the material impact on the bank," ABC's Chief Financial Officer, Brendon Hopkins said. The next phase of Bank ABC’s strategy, which was approved in late 2018, rests on four main pillars: to unlock the potential of our global wholesale bank, globalise and digitise our transaction banking business, enhance the Group’s operating model to increase resilience and strengthen culture, and continue to seek inorganic opportunities to address model constraints and enhance the Group’s returns. The bank's business at a global level shall be focusing on improving corporate and financial institutional client relationships by leveraging our network and capabilities to become a more effective partner, using multiple products across several countries on an ongoing basis. An important related initiative is reinforcing their global transaction banking business, leveraging their trade proposition alongside building a cash management business, which will meet a significant client need, as well as providing a source of diversification to the funding of the Bank. On the digital strategy, a major strategic initiative is the development of a mobile-first retail bank, which is planned to go live in Bahrain before the end of 2019. "It is planned to launch the Digital Bank in Bahrain before the end of 2019 with Fintech," Sael Al Waary, Deputy CEO said. The Central Bank of Bahrain (CBB) has approved the new bank and granted it a license. After launch in Bahrain, the intention is to expand into other MENA markets, such as Egypt and Jordan. The Bank’s balance sheet remains strong, resilient and increasingly well-diversified. The Basel III capital adequacy ratio and Tier 1 ratio at the year-end stood at 18.2 per cent and 17.2 per cent respectively, which is higher than those of many of our peers. The underlying investment portfolio is stable and liquid, continuing to become more geographically diverse. Customer deposits were $ 16.4 billion at the year-end, compared with $ 16.8 billion in 2017, and loans and advances were $ 14.9 billion, against $15.3 billion in 2017.