The Bank of Bahrain and Kuwait (trading code BBKB.BH) announced its financial results for the year ended December 31, 2021, where the bank achieved a net profit attributable to the shareholders of the bank amounting to 53.1 million Bahraini dinars, representing an increase of 2.1%. The net profit attributable to the shareholders of the bank during the last quarter of the year amounted to 12.6 million Bahraini dinars, a decrease of 3.2%.
Results for the last quarter of 2021:
The bank achieved a net profit attributable to the bank’s shareholders of 12.6 million dinars, a decrease of 3.2%, compared to 13.0 million dinars in the same period of the year 2020. Basic and diluted earnings per share for the last quarter amounted to 8 fils compared to 9 fils in the same period of the previous year. The total comprehensive income attributable to the bank’s shareholders amounted to BD 11.9 million during the last quarter of 2021, compared to BD 56.6 million in the same period in 2020, a decrease of 79.0%.
The decrease in net profit for the last quarter is mainly due to an increase in net provisions, which amounted to BD 0.8 million, compared to net recoveries of BD 1.2 million in the same period of the year 2020. In addition, fee and commission income decreased by 19.4% to BD 5.0 million. (BD 6.2 million in the corresponding period of the year 2020), net interest income decreased by 1.9% to BD 20.1 million (BD 20.5 million in the corresponding period of the previous year), and investment income and other income decreased by 11.1% to BD 2.4 million BD (2.7 million BD in the corresponding period of the previous year), and operating costs increased by 2.0% to 15.4 million BD (15.1 million BD in the corresponding period of the previous year) due to continuous investment in strategic initiatives. While the bank’s share of the profits of associates and joint ventures increased to BD 1.4 million, compared to a loss of BD 2.3 million in the corresponding period of the previous year, to offset the impact of the aforementioned decreases.
The decrease in total comprehensive income is due to the decrease in the valuation of investment securities during the last quarter of 2021.
Results for the fiscal year ending on December 31, 2021:
The bank achieved a net profit attributable to the shareholders of the bank amounting to BD 53.1 million, compared to BD 52.0 million in 2020, an increase of 2.1%. Basic and diluted earnings per share amounted to 36 fils (compared to 35 fils for the previous year). The total comprehensive income attributable to the bank’s shareholders for the year 2021 amounted to BD 59.5 million, compared to BD 28.9 million for the previous year, with a significant increase of 106.0%.
The increase in net income attributable to shareholders of the Bank for the year 2021 was supported by a 48.2% decrease in net provisions, which amounted to BD 2.9 million compared to BD 5.6 million for the previous year, mainly due to increased collection efforts and effective management of non-performing accounts. In addition, net interest income increased by 2.2% to BD 82.6 million compared to BD 80.8 million in the previous year due to the effective management of the group’s financial assets. The Bank’s share of the profits of associates and joint ventures amounted to a profit of 1.7 million Bahraini dinars, compared to a loss of 0.1 million Bahraini dinars during the previous year. On the other hand, the fee and commission income decreased by 18.9% to reach BD 15.9 million, compared to BD 19.6 million for the previous year, largely due to the impact of the exceptional measures taken in response to the Covid-19 pandemic to support the local business community, as well as the impact of the new regulatory limits on fees. and commissions. Also, income from investment and other income decreased by 6.6% to BD 17.1 million, compared to BD 18.3 million for the previous year. Operating costs increased marginally by 0.2% to reach BD 60.8 million compared to BD 60.7 million for the previous year as the bank continued to invest in implementing various strategic initiatives and strengthening its banking channels to improve customer experience.
The growth in comprehensive income was mainly driven by the positive valuation of investment securities as financial markets continued to recover from the effects of the COVID-19 pandemic.
Total shareholders’ equity amounted to BD542.8 million until the end of December 2021, compared to BD511.8 million until the end of the fiscal year 2020, an increase of 6.1%. This increase is mainly related to the profits of the current year and the improvement in the valuation of investment securities.
Total assets amounted to BD 3,672.7 million at the end of 2021 compared to BD 3,760.4 million at the end of 2020, a decrease of 2.3%. This is mainly due to a 42.8% drop in treasury bills to reach BD 279.2 million (December 31, 2020: BD 487.8 million). While the core assets of the bank recorded a good increase with an increase in net loans and advances by 3.3% to reach BD 1,607.2 million (December 31, 2020: BD 1,555.8 million), and the value of the investment portfolio increased by 3.0% to reach BD 985.8 million (December 31, 2020: 957.3 million Bahraini dinars). While the customer deposits portfolio decreased by 1.9% to reach BD 2,125.6 million (December 31, 2020: BD 2,167.4 million), while the ratio of loans to customer deposits stabilized at a good level of 75.6% compared to 71.8% at the end of December 2020.
Based on the positive financial results for this year, the Board of Directors of BBK recommended paying annual cash dividends of 20 fils per share and bonus shares of 10% per share equivalent to one share for every 10 shares to the shareholders registered with the bank on the due date, subject to the approval of the General Assembly. Ordinary and regulatory authorities.
On this occasion, the Board of Directors expressed their satisfaction with the financial results, stating: “We are pleased with the good results and progress made in implementing various strategic initiatives, as 2021 marked the last year of our strategic cycle, and we have made excellent progress in our journey towards digital transformation. The Group’s upcoming three-year strategic cycle will be driven by continuous innovation in digital products and platforms, a proactive acquisition strategy, and an intense focus on providing best in class customer service. As we celebrate our fiftieth anniversary, the Board looks to ensure sustainable growth by enhancing the Group’s resilience and efficiency, adapting to new challenges and protecting the Group’s capital position, while continuing to invest in our Environmental, Social and Governance strategy to meet pressing societal needs. We express our sincere thanks to our shareholders for their continued support and trust in us, and we also thank our customers for their continued loyalty and support, and we extend our deep thanks to the management team and employees for their continuous efforts and ability to adapt to changes.”
For his part, Dr. Abdul Rahman Saif, Group CEO of BBK said: “The strong results achieved by BBK reflect the bank’s flexibility, the evolution of its business model, its resilience and its exceptional ability to adapt to the dynamic environment and withstand the exceptional challenges imposed by the pandemic. We are proud that during 2021 we launched multiple digital platforms and many new products and services to enhance our customers’ banking experience. In addition, we continued our unwavering commitment to supporting our customers and the local economy and contributing to the improvement of the communities in which we operate. We are pleased with the positive feedback from customers and the high participation rate, as this led to achieving the highest growth in the bank’s customer base after introducing digital services for opening accounts and applying for loans and launching a unified application for smartphones and the Internet. During the year, we continued to provide our support for development projects by supporting various projects in the tourism, electricity and water sectors. Global Business Magazine (GBM) and IBS Intelligence both commended BBK’s significant contribution to Bahrain’s financial services sector in 2021, GBM presented the ‘Best Retail Bank’ award and IBS presented the ‘Best Transaction Banking Execution’ award. Global Economics also awarded the bank with the ‘Most Customer Concern Retail Bank’ award. In addition, the Bank was honored with an award from the World Economic Review for the “Best Initiative in Response to the COVID-19 Pandemic for the Corporate Banking Sector in Bahrain”. As we celebrate the bank’s fiftieth anniversary this year, we look to the future with optimism, and we are confident in the Group’s ability to continue to provide the best value to our shareholders, support our customers and employees, and contribute to the development and prosperity of our society.”
The full financial statements and press release can be found on the Bahrain Bourse website.