Ithmaar Bank B.S.C. (closed), a Bahrain-based Islamic retail bank, announced its financial results for the nine-month period ended 30 September 2020 with continued focus on customer-centric growth.

The announcement, by Ithmaar Bank Chairman His Royal Highness Prince Amr Al Faisal, follows the review and approval of the Board of Directors of the Bank’s consolidated financial results for the nine-month period ended 30 September 2020.

Ithmaar Bank’s financial results show a net loss attributable to equity holders for the nine-month period ended 30 September 2020 of BD4.18 million compared to the net profit of BD2.67 million reported for same period in 2019. The loss is mainly due to prudent impairment provisions as a result of the economic impact of the Covid-19 pandemic.

The Bank’s financial results show a net loss attributable to equity holders for the three-month period ended 30 September 2020 of BD2.15 million compared to a net profit of BD0.56 million for the same period in 2019. 

Overall, the Bank’s results show a net loss for the nine-month period ended 30 September 2020 of BD0.71 million, a 114 percent decrease compared to the net profit of BD5.28 million reported for the same period in 2019. Net loss for the three-month period ended 30 September 2020 was BD0.92 million, compared to a net profit of BD1.19 million report for the same period in 2019.

“On behalf of the Ithmaar Bank Board of Directors, I am pleased to report that, despite the unprecedented challenges of the global pandemic, the Bank continues to grow its core business,” said HRH Prince Amr. “This is, in large part, a result of the Bank’s unwavering commitment to focus on its determination to become one of the region’s leading retail banks,” he said.

“Ithmaar Bank is a growing, resilient bank that continues to invest in the future and plays a key role in the community. Although the Bank did not report a profit attributable to equity holders for the period, it continues to demonstrate significant resilience to challenging market conditions,” said HRH Prince Amr. “Customer deposits, for example, continue to grow despite the extraordinarily turbulent economic conditions, a strong testimony to the market’s confidence in the Bank,” he said.

Total income for the nine-month period ended 30 September 2020 was BD129.98 million, a 6 percent increase compared to the total income of BD122.59 million reported for the same period in 2019, mainly due to increases in core income, particularly the Bank’s share of income earned as a Mudarib and higher income from Government securities. Total income for the three-month period ended 30 September 2020 was BD36.72 million, a 15 percent decrease compared to the total income of BD43.41 million reported for the same period in 2019.

Operating income for the nine-month period ended 30 September 2020 was BD70.55 million, an 18 percent increase compared to the BD59.91 million reported for the same period in 2019. Operating income for the three-month period ended 30 September 2020 was BD20.38 million, a 4 percent increase compared to the total income of BD19.55 million reported for the same period in 2019.

Ithmaar Bank’s total assets remained stable, at BD3.1 billion as at 30 September 2020, a 3 percent increase compared to BD3 billion as at 31 December 2019.

Total owners’ equity stood at BD57.98 million as at 30 September 2020, a 27 percent decrease compared to BD79.17 million as at 31 December 2019, resulting mainly from the day-1 modification loss due to six months’ deferment of customer instalments to help the customers overcome the economic impact of the Covid-19 pandemic.

Total consolidated equity, as at 30 September 2020, is below the minimum BD100 million required by the Central Bank of Bahrain (CBB) and the Board of Directors are working on issuing Additional Tier 1 capital (AT1) of up to BD62 million to strengthen the Bank’s consolidated equity and meet the regulatory requirements. Following the shareholders’ approval, the Bank is in the process of completing all the necessary formalities to ensure the minimum capital requirements are met.

“Despite challenging market conditions, the equity of unrestricted investment account holders grew to BD1.19 billion as at 30 September 2020, a 12 percent increase compared to BD1.06 billion as at 31 December 2019. Customers’ current accounts also grew to BD623 million as at 30 September 2020, a 9 percent increase compared to BD572 million as at 31 December 2019,” said Ithmaar Bank Chief Executive Officer, Ahmed Abdul Rahim.  

The growth in customer deposits, particularly during these difficult circumstances faced by all economies, reflects customer confidence in the Bank and reconfirms that efforts to grow closer to our customer are, indeed, paying off. “Ithmaar Bank is determined to become the Islamic retail bank of choice,” said Abdul Rahim. “To help realise this, we invest tremendous time, money and effort on continuously enhancing our products and services and on growing closer to our customers to enhance their banking experience,” he said.

“The Bank’s steady focus on its core retail banking business is building a stable foundation while setting the stage for continued growth” said Abdul Rahim. “In line with our ongoing efforts to encourage customers to bank online, the Bank launched an all-new mobile application (app). The mobile app allows users to instantly open an account directly from their mobile phones, while reducing the need to physically visit a branch. Bahraini and non-Bahraini residents can now securely open new accounts in just a few minutes by simply downloading mobile app from anywhere and at any time,” he said.

In October, the Bank launched special financing offers for Mazaya programme beneficiaries to purchase villas at the Danaat Al Lawzi development, located at the West of Hamad Town. Similar offers were launched for the Deerat Al Oyoun development in Diyar Al Muharraq and other key developments in the Kingdom. The special financing offers are designed exclusively for beneficiaries of the Mazaya programme, the Kingdom of Bahrain’s social housing scheme that aims to help eligible Bahraini nationals buy their first homes. As part of this programme, citizens are offered government-subsidised financing to help them buy their homes.

In June, despite the economic slowdown by the global pandemic, Ithmaar Bank announced the opening of a new branch in Hamad Town, effectively relocated the Al Hamalah branch to a new, better and more accessible location with ample parking facilities.

Earlier this year, Ithmaar Bank, in collaboration with Mastercard, launched a new service that allows Ithmaar Bank customers to transfer money from Bahrain to various countries around the world almost instantly. The service, called IthmaarSEND, is provided to customers directly from the Ithmaar Bank eBanking platform and offers a faster, simpler and more secure way of transferring money abroad from almost anywhere in the world, through mobile phones, tablets or any other internet-connected device.