Warba Bank Financial Results – First Half 2019

Warba Bank announced results of its operations for the first half of the current year, which indicate that the bank’s net profit (after tax deductions) scored KD 6.50 million, compared with KD 5.20 million for the same period of 2018, indicating that the bank continued its positive performance achieving growth net profits by KD 1.30 million or by 25%. This is due to the absolute rise in total operating income by higher a value than the rise in total operating expenses. Therefore, the bank’s operating profit rose by KD 2.07 million, reaching KD 16.36 

In details, total operating income increased by KD 4.04 million or by 17.7%, and scored KD 26.88 million compared with KD 22.84 million for the same period of 2018. This resulted from the rise in the item of net financing income by KD 3.21 million or by 19.8%, reaching KD 19.41 million versus KD 16.20 million. Also, item of net investment income and net fees & commission increased by a total of KD 1.01 million.   

On the other hand, total operating expenses increased by a lesser value than the increase in total operating income. It rose by KD 1.98 million or by 23.1% and scored a total of KD 10.52 million, compared with KD 8.54 million. The increase included the items of staff costs and depreciation expenses by KD 2.51 million, while item of general & administrative decreased by KD 529 thousand. Percentage of total operating expenses to total operating income scored 39.1% compared with 37.4%. Item of provision for impairment increased by KD 701 thousand and scored KD 9.55 million, compared with KD 8.85 million in the same period last year. This explains the rise in the net profit margin to 24.2% in the first six months of current year, compared with 22.8% in the same period last year.

The bank’s financial statements indicate that total assets increased by KD 525.8 million or by 24%, reaching KD 2.720 billion versus KD 2.194 billion in the end of 2018. Total assets increased by KD 773.8 million or by 39.8%, if compared with the same period of 2018 when it scored KD 1.947 billion. Item of financing receivables rose by KD 322.7 million or by 20.1%, reaching KD 1.931 billion (71% of total assets) versus KD 1.608 billion (73.3% of total assets) in the end of 2018. It rose by KD 543.2 million or by 39.1%, compared with KD 1.388 billion (71.3% of total assets) in the same period of 2018. Percentage of total financing receivables to total deposits scored 80.9% versus 79.9%.

Figures indicate that the bank’s total liabilities (excluding total equity) increased by KD 515.1 million or by 26.8% and scored KD 2.439 billion, compared with KD 1.924 billion in the end of 2018. It increased by KD 670.4 million or by 37.9%, compared with the total in the same period of last year when it reached KD 1.768 billion. Percentage of total liabilities to total assets was at 89.6%, compared with 90.8%.

Results of analyzing financial statements calculated on annual basis indicate that most bank’s profitability ratios declined compared with the same period of 2018. The average return on shareholders’ equity relevant to the bank shareholders (ROE) decreased to 6.5% compared with 10.3%. Average return on capital (ROC) decreased to 8.7% versus 10.4%. Likewise, the average return on bank’s assets (ROA) decreased slightly to 0.53% compared with 0.56%. Earnings per share (EPS) scored 2.69 Fils versus 2.54 Fils. (P/E) scored 46.1 versus 42.5, due to the rise in the EPS by 5.9% against a greater rise in the share market price by 14.8%, compared to their levels in the same period of last year. (P/B) scored 1.3 times compared with 1.2 times.