IB Capital acquires an additional stake in Solidarity Group Holding Capital


Prince Amr Al-Faisal and Ahmed Abdul Rahim

KUWAIT: Ithmaar Holding B.S.C., a Bahrain-based financial institution, and its wholly-owned subsidiary, Ithmaar Bank B.S.C. (closed), a Bahrain-based Islamic retail bank, both reported profits as they each announced their financial results for 2018.

The announcement by the Ithmaar Holding Chairman Prince Amr Al-Faisal, who is also the Ithmaar Bank Chairman, follows the review and approval of both Board of Directors of the consolidated financial results for the year ended 31 December 2018.

Ithmaar Holding reported a net profit of $10.06 million for the year ended 31 December 2018, as compared to a net loss of $72.40 million for 2017. This included a net loss attributable to equity holders for the year ended 31 December 2018 of $23.98 million, as compared to the $84.71 million net loss reported for the same period in 2017. EPS for the year has improved to negative US Cents 0.82 compared from negative US Cents 2.91 for the same period in 2017.

The results included a net loss of $1.28 million for the three-month period ended 31 December 2018, as compared to a net loss of $56.2 million for 2017. Net loss attributable to equity holders for the three-month period ended 31 December 2018 was $26.71 million, a decrease of 53.7 percent as compared to a net loss of $57.67 million reported for the same period in 2017. EPS for the three-month period ended 31 December 2018 decreased by US Cents 0.92 compared to negative US Cents 1.98 for the same period in 2017.

Also in December 2018, Ithmaar Holding's other wholly-owned subsidiary, IB Capital, acquired, an additional stake in Solidarity Group Holding, one of the largest Takaful Group companies in Bahrain. As a result, Solidarity Group Holding became a subsidiary of IB Capital. During December 2018, Dilmunia Development Fund I L.P, a fund which is managed by Ithmaar's wholly-owned subsidiary, Ithmaar Bank, became subsidiary of Ithmaar Bank after the Bank's shareholding in the company increased to more than 50 percent.

"On behalf of the Ithmaar Holding Board of Directors, I am pleased to announce that, despite increasingly challenging market conditions, the Group is continuing its planned transformation in 2018 and concluded the year with remarkable achievements," said HRH Prince Amr. "These included improved financial performance, as well as the realization of key growth initiatives," he said.

"The 2018 results show that net income before provision for impairment and overseas taxation for the year ended 31 December 2018 increased to $43.42 million, a 96.8 percent increase from the $22.10 million reported for the same period last year," said Prince Amr. This was mainly due to higher share of profit after tax from associates resulting from reclassification from held-for-sale to associate during the period," he said.

"As a result, our operating income for the year ended 31 December 2018 increased to $259.82 million, a 12.7 percent increase from the $230.56 million reported for 2017. Operating income for the three-month period ended 31 December 2018 was $48.34 million, a 2.3 percent decrease from the $49.48 million reported for the same period in 2017," said Prince Amr.

"Ithmaar's balance sheet decreased marginally by 1.4 percent with total assets at $8.49 billion as at 31 December 2018, compared to $8.61 billion as at 31 December 2017," said Prince Amr. Total owners' equity stood at $116.36 million as at 31 December 2018, a 67.3 percent decrease compared to $355.33 million as 31 December 2017, mainly due to the Accounting standard, FAS 30 impact of previous year recognized in equity and the foreign exchange impact of devaluation of Pak rupee during the year recognized in equity," he said.

"On behalf of both Boards of Directors, I take this opportunity to express our sincere thanks and appreciation to our shareholders for their confidence, and to the relevant regulators and other authorities for their guidance and support," said Prince Amr. "In particular, we are grateful to the Central Bank of Bahrain, to the Bahrain Ministry of Industry, Commerce and Tourism, the Bahrain Bourse, Boursa Kuwait and the Dubai Financial Market for their continuous guidance and support," he said.

"I am pleased to inform you that as part of its Digital Strategy, Ithmaar Bank completed a major upgrade during 2018 to its IT infrastructure and systems. The upgrade, which was implemented to help support business growth, improve operational efficiency, improve internal controls and enhance customer experience, included a major project of upgrading the Bank's core banking system and implementation of new eBanking system. The new system provides a strong foundation to support growth, allowing for the flexibility of quickly launching new products and services with focus on customer centricity," said Prince Amr.

Ithmaar Holding Chief Executive Officer, Ahmed Abdul Rahim, who is also the Ithmaar Bank Chief Executive Officer, said that performance of both institutions against the challenging market conditions of 2018 further reconfirm that sustained efforts to turn the Group around are indeed paying off.

"Ithmaar Bank's financial results show a net profit of BD14.14 million for the year ended 31 December 2018, an increase of 126.7 percent compared to the net profit of BD6.24 million reported in 2017," said Abdul Rahim. "Net profit attributable to equity holders for the year ended 31 December 2018 was BD1.41 million, a decrease of 10.9 percent compared to the net profit of BD1.58 million reported in 2017," he said.

"The results included a net profit of BD9.38 million of the three-month period ended 31 December 2018, compared to a net loss of BD0.44 million reported in 2017," said Abdul Rahim. "Net loss attributable to equity holders for the three-month period ended remains unchanged at $0.15 million compared to same period previous year," he said.

"Net income before provision for impairment and overseas taxation for the year ended 31 December 2018 was BD13.70 million, a 28 percent decrease compared to the BD19.03 million reported for 2017," said Abdul Rahim. "Total income remained stable in 2018, with the Bank reporting BD151.7 million for the year ended 31 December 2018," he said.

"Ithmaar Bank's balance sheet decreased marginally by 3.5 percent with total assets at BD3.13 billion as at 31 December 2018, compared to BD3.24 billion as at 31 December 2017," said Abdul Rahim. "Meanwhile, due to market conditions, the equity of unrestricted investment account holders stood at BD1 billion as at 31 December 2018, a decrease of 6.6 percent as compared to BD1.06 billion as at 31 December 2017. Total owners' equity stood at BD85.39 million as at 31 December 2018, a 44.8 percent decrease compared to BD154.60 million as 31 December 2017, mainly due to the Accounting standard, FAS 30 impact of previous year recognized in equity and the foreign exchange impact of devaluation of Pak rupee during the year recognized in equity," he said.

"I am also delighted to inform you that Ithmaar Bank's retail banking subsidiary in Pakistan, Faysal Bank Limited, has maintained growth momentum and the Bank's footprint now extends to 455 branches in more than 100 cities across Pakistan, after having added 50 branches during 2018. The Bank aims to have expanded its retail banking network by 100 during 2019 to reach 555 branches by the end of 2019," he said.

Early in 2018, the Bank launched the Ithmaar eQ app, which is a smartphone electronic queuing app designed to significantly reduce and potentially even eliminate customer waiting time altogether. The Ithmaar eQ app allows customers to directly book appointments or issue virtual eTickets for the nearest or most convenient branch, timings and directions, and notifies customers when their turn approaches. The app also provides significant MIS on customer behaviour. Ithmaar Bank operates one of the largest retail banking networks in Bahrain with 16 branches and 45 ATMs in strategic locations around the Kingdom.