Boubyan Bank Financial Results 2019

Boubyan Bank announced results of its operations for the year ending December 31st 2019, which indicate that the bank’s profits (after tax deductions) reached KD 62.7 million, a rise by KD 6.5 million or by 11.5% compared with KD 56.2 million for 2018. The rise in net profits is attributed to the absolute rise in total operating income by a higher value than the rise in total operating expense, accompanied by the decrease in total provisions. As a result, the bank’s operating profit (prior to the deduction of provisions) rose by KD 1.7 million or by 2.1%. The following graph displays development in profit level relevant to the bank shareholders during the period (2008-2019).

In details, the bank’s total operating income increased by KD 6 million or by 4.3%, reaching KD 145.7 million versus KD 139.7 million for the same period of 2018. This resulted from the rise the item of net investment income by KD 3.1 million or by 295.3%, to KD 4.2 million compared with KD 1.1 million. Also, item of net fees & commission income rose by KD 3 million or by 22.3%, to KD 16.4 million compared with KD 13.4 million. While item of net financing income declined by KD 847 thousand, reaching KD 119.5 million compared with KD 120.3 million. 

Total operating expenses increased by a lesser value than the increase in total operating income, i.e. by KD 4.3 million or by 7.6%, and scored KD 61.1 million versus KD 56.8 million in the same period of 2018. This was achieved due to the rise of staff costs and depreciation items by a total of KD 6.1 million, while item of general & administrative expenses decreased by KD 1.8 million. Percentage of total operating expenses to total operating income scored 41.9% compared with 40.6%. Provision for impairment decreased by KD 5.1 million or by 21.5%, reaching KD 18.7 million versus KD 23.8 million in 2018. The result explains the rise in net profit margin to 43% against 40.2% for 2018.The bank’s financial statements indicate that total assets increased by KD 955.8 million or by 22%, and scored KD 5.301 billion compared with KD 4.345 billion in the end of 2018. Item of Islamic financing to customers increased by KD 466.5 million or by 14.3%, reaching KD 3.729 billion (70.3% of total assets) compared with KD 3.263 billion (75.1% of total assets) in the end of 2018. Percentage of Islamic financing to customers to total customers’ deposits scored 81.3% compared with 85.4% in 2018. Item of cash & balances with banks rose by KD 148.6 million or by 177.3%, and scored KD 232.4 million (4.4% of total assets) versus KD 83.8 million (1.9% of total assets) in the end of 2018. Also, item of deposits with other banks increased by KD 190.3 or by 80.2% million, and scored KD 427.3 million (8.1% of total assets) compared with KD 237.1 million (5.5% of total assets) in the end of 2018.

Figures indicate that the Bank’s liabilities (excluding total equity) increased by KD 788.5 million or by 20.4%, and scored KD 4.647 billion compared with KD 3.859 billion in the end of 2018. Percentage of total liabilities to total assets scored 87.7% versus 88.8% in 2018.Results of analyzing financial statements indicate that the bank’s profitability ratios showed mixed performances compared with 2018. The average return on shareholders’ equity (ROE) decreased to 12.7% versus 14.3%. The average return on capital (ROC) decreased to 23.8% versus 24.1%. Likewise, the average return on assets (ROA) dropped to 1.30% versus 1.35%. While earnings per share (EPS) rose to 20.40 Fils compared with 19.17 Fils. (P/E) scored was 31.4 times compared with 29.2 times, due to the rise in the EPS by 6.4% against a greater rise in the share market price by 14.5% above their level in the end of 2018, (P/B) scored 2.83 times compared with 2.75 times.The bank announced that it would distribute cash dividends by 9%, i.e. 9 Fils and 5% as bonus shares. Indicating that the share achieved 1.4% cash yield on the closing price registered in the end of 2019 in the amount of 641 Fils per share. These distributions were at 8% cash and 5% as bonus shares in 2018, which indicates that the bank has increased its distributions.