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Arab Bank's Q1 net profit plunges 36%

Dubai - The group's loan-to-deposit ratio stood at 74.4 per cent.

Arab Bank Group reported net income after tax for the first-quarter of 2020 of $147.6 million as compared to $231.8 million for the prior period, recording a decrease of 36 per cent. Total loans amounted to $26.2 billion as of March 31, 2020 compared to $25.8 billion for the same period in the previous year.
Total loans amounted to $26.2 billion as of March 31, 2020 compared to $25.8 billion for the same period in the previous year, with a growth rate of 2 per cent, while customer deposits grew by 5 per cent to reach $35.2 billion compared to $ 33.7 billion for the same period in the previous year. The group maintained its strong capital base with equity of $9.2 billion and a capital adequacy ratio of 16.5 per cent.
Sabih Masri, chairman of the board of directors, remarked that the performance of Arab Bank confirms the success of the diversified business model of the group regionally and globally. He also pointed out that the next phase will be challenging for the global and regional economies and will witness a slowdown in growth and difficulties for various sectors as a result of the outbreak of the Coronavirus pandemic.
Nemeh Sabbagh, chief executive officer, said that the group net operating income dropped by only two per cent, but the bank opted to build more provisions during the first quarter of 2020 as a precautionary measure against the financial implications of Covid-19, and this resulted in the decrease in the reported net income after tax.
Sabbagh added that Arab Bank Group enjoys high liquidity and strong and robust capitalisation. The group's loan-to-deposit ratio stood at 74.4 per cent while the capital adequacy ratio calculated in accordance with Basel III regulations is at 16.5 per cent, and credit provisions held against non-performing loans continue to exceed 100 per cent. - business@khaleejtimes.com