Warba Bank Financial Results – 30 September 2019

Warba Bank announced results of its operations for the first nine months of the current year, indicating that the bank’s net profits (after tax deduction) scored KD 12.1 million compared with KD 8.1 million for the same period of 2018, showing a positive performance in achieving growth in its profits by KD 4 million or by 49.4%. This rise was due to the absolute rise in total operating income by a higher value than the rise in total operating expenses. Therefore, the operating profit increased by KD 4.1 million or by 18.7%, reaching KD 25.9 million compared with KD 21.8 million in the same period of last year.

In details, the bank’s total operating income increased by KD 7 million or by 20.2%, and scored KD 41.9 million compared with KD 34.9 million for the same period of 2018. This resulted from the rise in all items of the operating income, most importantly item of net financing income that increased by KD 4.4 million, scoring KD 29.2 million versus KD 24.8 million. Also, item of net investment income increased by KD 1.6 million, to reach KD 8.8 million compared with KD 7.2 million.

Total operating expenses increased by a lesser value than the increase in total operating income. It increased by KD 3 million or by 22.7%, reaching KD 16 million compared with KD 13 million, as a result of the total increase in items of staff costs and depreciation expenses by KD 3.7 million, while item of general & administrative expenses declined by KD 762 thousand. Percentage of total operating expenses to total operating income scored 38.2% compared with 37.4%. Item of provision for impairment dropped by KD 101 thousand and scored KD 13.22 million compared with KD 13.32 million. This explains the rise in the net profit margin to 28.9% compared with 23.3% in the same period of last year.

The bank’s financial statements indicate that total assets increased by KD 890.2 million or by 40.6%, and scored KD 3.085 billion versus KD 2.194 billion in the end of 2018. While total assets increased by KD 1.113 billion or by 56.5%, if compared with the same period of 2018 when it scored KD 1.971 billion. Item of financing receivables rose by KD 462.2 million or by 28.7%, and scored KD 2.070 billion (67.1% of total assets) compared with KD 1.608 billion (73.3% of total assets) in the end of 2018. It rose by KD 617.8 million or by 42.5%, compared with KD 1.452 billion (73.7% of total assets) in the same period 2018. Percentage of total financing receivables to total deposits scored 79.6% versus 82.6%. Item of cash and balances with banks rose by KD 178.5 million, reaching KD 198.5 million (6.4% of total assets) compared with KD 20 million (0.9% of total assets) in the end of 2018. It rose by KD 142.9 million compared with KD 55.6 million (2.8% of total assets) in the same period of 2018. 

Figures indicate that the bank’s liabilities (excluding total equity) increased by KD 873.6 million or by 45.4%, to score KD 2.797 billion compared with KD 1.924 billion in the end of 2018. It also rose by KD 1.006 billion or by 56.2%, compared with a total of KD 1.791 billion in the same period of last year. Percentage of total liabilities to total assets scored about 90.7% compared with 90.8%.

Results of analyzing financial statements calculated on annual basis indicate that the bank’s profitability ratios showed a mixed performance compared with the same period of 2018. The average return on equity relevant to bank’s shareholders (ROE) decreased to 8% compared with 10.6%. Likewise, average return on capital (ROC) dropped slightly to 10.79% versus 10.84%. The average return on bank’s assets (ROA) increased slightly to 0.61% compared with 0.58%. Earnings per share (EPS) scored 4.80 Fils versus 2.97 Fils. (P/E) scored 38.9 times (improved) versus 59.1 times, due to rise in EPS by 61.6% against a lower increase in the market share price by 6.4%. (P/B) scored 1.8 times compared with 2.3 times.