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Bank of Sharjah today announced its financial results for the nine months ending September 30, 2013. In the nine months to September 30, 2013, through a combination of sound financial management, balance sheet strength and asset quality, the Bank’s net profit grew by 20% to AED 263 million.
Importantly, during this period, the Bank continued to strengthen its balance sheet, growing its loan book while enhancing its liquidity position at the same time.
As of September 30, 2013 total assets were AED 24,415 million, an increase of 12% against the corresponding September 30, 2012 figure of AED 21,888 million, and a 7% increase when compared to the December 31, 2012 balance. The increase was driven largely by growth in customer deposits.
Customer deposits reached AED 17,826 million as of September 30, 2013, a 15% growth from the corresponding September 30, 2012 figure of AED 15,539 million. Compared to the December 31, 2012 figure of AED 16,476 million, the growth in deposits was 8%.
Loans and advances reached AED 12,970 million, 5% above the corresponding September 30, 2012 figure of AED 12,352 million. Compared to the position as at December 31, 2012, the loan book increased by 4% from AED 12,444 million.
As at 30 September 2013, the loans-to-deposits ratio further improved by 8% reaching 0.73 versus 0.79 in September of 2012, thereby leading to the 43% increase in the Bank’s net liquidity. Net liquidity stood at AED 7,212 million as of September 30, 2013 versus AED 5,026 million as at September 30, 2012. Furthermore, the Bank’s capital adequacy ratio stood at 22.14% as at September 30, 2013 compared to 21.62% for the same period in 2012.
The Bank’s net interest income, for the nine-month period to September 30, 2013, decreased by 9%, as a function of the 15% increase in deposits.
Non-interest income for the period ending September 30, 2013 surged by 117% as a result of higher investment income. This was due to the overall improvement experienced in the world’s financial markets in general and the U.A.E financial markets in particular. This enhanced the Bank’s investment position, with higher returns generated across the portfolio. Furthermore, and as a result of the burgeoning U.A.E economy, commission income witnessed a significant improvement driven by the increase in the tradefinance related activities.
In combination, these factors led to the 25% increase in the earnings per share and the 20% increase in net income reported in the period, which reached AED 263 million compared to AED 218 million in the corresponding 2012 period. Meanwhile, comprehensive income rose by 38%, driven by the unrealized gains on the non-trading investment portfolio, whose results are only reflected in equity.
During this period, Capital Intelligence, the international credit rating agency, reaffirmed Bank of Sharjah’s Long-term Issuer Default Rating at ‘A-’ with a stable outlook. The firm attributed the Bank’s individual rating to its good management, strong capital adequacy and liquidity, in addition to good operating profitability.
Also, within this quarter, the Bank signed a USD 200 Million two-year club loan facility with a syndicate of Local and Multinational Mandated Lead Arrangers. The deal reflects Bank of Sharjah’s solid standing among the country’s leading commercial banks and the respect it commands within the international banking community.
Mr. Ahmed Al Noman, the Chairman, commented on the performance of the Bank and stated that the Board is satisfied with the interim results. The generally improved market sentiment will lift further by year-end the valuation of assets and recoveries and is expected to boost overall profitability.
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