Bank of Sharjah today announced its financial results for the year ended December 31, 2012. The bank continued to enhance its balance sheet structure and improve its profitability with total assets increasing by 9% as of December 31st, 2012. The growth in Total Assets was led by Customer Deposits, which increased by 10% during the year. Net income for the year reached AED 277 million, 9% above the corresponding 2011 figure.

Total Assets reached AED 22,859 million, 9% above the December 31, 2011 figure of AED 20,934 million.

The Bank continued to grow its deposit base which reached AED 16,476 million as of December 31st, 2012, 10% over the December 31, 2011 figure of AED 14,940 million.

Loans and Advances reached AED 12,473 million, 4% above the December 31, 2011 figure of AED 12,039 million.

The continued increase in deposits over loans and advances has enhanced the loans-to-deposits ratio which further improved during the year to 0.76 in December 2012 from 0.81 in December 2011. This led to the 26% surge in net liquidity which reached AED 6 billion by the end of 2012 compared to AED 4.8 billion at the end of 2011.

The 6% decline in net interest income was mainly driven by the 10% increase in deposits, in addition to the excess liquidity which is placed at extremely low interbank interest rates.

The 11% increase in non interest income was driven by the improvement witnessed in the financial markets during the last quarter of the year.

The collective impairment provision for the 2012 year has declined against a backdrop of an improved economic environment and the overall performance of the credit portfolio. During the year, the Bank has set aside AED 115 million of such provisions, raising the Bank’s cumulative balance of collective impairment provision to AED 658 million.

All the above, led to the 9% increase in the current year net profit to reach AED 277 million versus AED 254 million for the year ending December 31, 2011. As a result, earnings per share for the year gained 20% and reached 13.5 fils compared to 11.2 fils in 2011.

Total comprehensive income grew by 13% to reach AED 273 million versus AED 242 in 2011 on the back of the improvement in the financial markets.

In line with the Bank’s expansion strategy to further avail its services to existing and prospective customers throughout the country, the Bank has taken a number of initiatives during the year. It has expanded its Private Banking Wealth Management (PBWM) division in collaboration with Commerzbank International S.A. Luxembourg. This step will widen and diversify the reach of the Bank’s financial services by catering to a niche market of discerning customers. Furthermore, a new branch was opened in Dubai Media City and work is well underway to open a branch in Mussafah, the industrial area of Abu Dhabi.

Commenting on the results, Mr. Varouj Nerguizian, the Bank’s Executive Director and General Manager, said: “The 2012 results affirmed the solid structure of the Bank’s balance sheet. The Bank’s ample liquidity in addition to its expansion strategy will competitively position the Bank and allow it to take full advantage of the positive developments in the economical scene of the UAE. While profitability improved by 13% it remained subdued by across the board application of new regulatory guidelines geared more towards retail activity than the corporate model of the Bank. The real potential of Bank of Sharjah will be revealed by a number of positive developments in strategic investments during 2013-2014.”