ARAB BANKING CORPORATION (B.S.C.) Arab Banking Corporation (B.S.C.)
INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
31 MARCH 2024 (REVIEWED)
Ernst & Young - Middle East | Tel: | +973 1753 5455 |
P O Box 140 | Fax: | +973 1753 5405 |
10th Floor, East Tower | manama@bh.ey.com | |
Bahrain World Trade Centre | C.R. No. 29977-1 | |
Manama | ||
Kingdom of Bahrain |
REPORT ON REVIEW OF INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS TO THE BOARD OF DIRECTORS OF
ARAB BANKING CORPORATION (B.S.C.)
Introduction
We have reviewed the accompanying interim condensed consolidated financial statements of Arab Banking Corporation (B.S.C.) [the "Bank"] and its subsidiaries [together the "Group"] as at 31 March 2024, comprising of the interim consolidated statement of financial position as at 31 March 2024 and the related interim consolidated statements of profit or loss, comprehensive income, cash flows and changes in equity for the three-month period then ended, and explanatory notes. The Bank's Board of Directors is responsible for the preparation and presentation of these interim condensed consolidated financial statements in accordance with International Accounting Standard 34 Interim Financial Reporting (IAS 34). Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34.
12 May 2024
Manama, Kingdom of Bahrain
A member firm of Ernst & Young Global Limited
Arab Banking Corporation (B.S.C.)
INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 March 2024 (Reviewed)
All figures in US$ Million | ||||
Reviewed | Audited | |||
31 March | 31 December | |||
Notes | 2024 | 2023 | ||
ASSETS | ||||
Liquid funds | 2,356 | 4,466 | ||
Trading securities | 1,352 | 1,070 | ||
Placements with banks and other financial institutions | 2,116 | 2,231 | ||
Securities bought under repurchase agreements | 1,482 | 2,191 | ||
Non-trading investments | 4 | 11,916 | 11,368 | |
Loans and advances | 5 | 18,675 | 19,096 | |
Other assets | 3,298 | 3,210 | ||
Premises and equipment | 240 | 260 | ||
TOTAL ASSETS | 41,435 | 43,892 | ||
LIABILITIES | ||||
Deposits from customers | 22,040 | 23,705 | ||
Deposits from banks | 4,448 | 4,135 | ||
Certificates of deposit | 230 | 142 | ||
Securities sold under repurchase agreements | 5,808 | 6,933 | ||
Taxation | 116 | 146 | ||
Other liabilities | 2,687 | 2,724 | ||
Borrowings | 1,399 | 1,303 | ||
Total liabilities | 36,728 | 39,088 | ||
EQUITY | ||||
Share capital | 3,110 | 3,110 | ||
Treasury shares | (6) | (6) | ||
Statutory reserve | 569 | 569 | ||
Retained earnings | 1,283 | 1,283 | ||
Other reserves | (1,149) | (1,046) | ||
EQUITY ATTRIBUTABLE TO THE SHAREHOLDERS OF | ||||
THE PARENT | 3,807 | 3,910 | ||
Additional / perpetual tier-1 capital | 390 | 390 | ||
Equity attributable to the shareholders of the parent | ||||
4,197 | ||||
and perpetual instrument holders | 4,300 | |||
Non-controlling interests | 510 | 504 | ||
Total equity | 4,707 | 4,804 | ||
TOTAL LIABILITIES AND EQUITY | 41,435 | 43,892 | ||
These interim condensed consolidated financial statements were authorised for issue by the Board of Directors on 12 May 2024 and signed on their behalf by the Chairman, Deputy Chairman and the Group Chief Executive
ChairmanDeputy ChairmanGroup Chief Executive Officer The attached notes 1 to 12 form part of these interim condensed consolidated financial statements.
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Arab Banking Corporation (B.S.C.)
INTERIM CONSOLIDATED STATEMENT OF PROFIT OR LOSS Three-month period ended 31 March 2024 (Reviewed)
All figures in US$ Million | |||||
Reviewed | |||||
Three months ended | |||||
31 March | |||||
Notes | 2024 | 2023 | |||
OPERATING INCOME | |||||
Interest and similar income | 827 | 661 | |||
Interest and similar expense | (594) | (438) | |||
Net interest income | 233 | 223 | |||
Other operating income | 6 | 110 | 76 | ||
Total operating income | 343 | 299 | |||
OPERATING EXPENSES | |||||
Staff | 122 | 108 | |||
Premises and equipment | 14 | 13 | |||
Other | 62 | 53 | |||
Total operating expenses | 198 | 174 | |||
NET OPERATING PROFIT | |||||
BEFORE CREDIT LOSS | |||||
EXPENSE AND TAXATION | 145 | 125 | |||
Credit loss expense | 7 | (36) | (43) | ||
PROFIT BEFORE TAXATION | 109 | 82 | |||
Taxation charge | (18) | ||||
on foreign operations | (11) | ||||
PROFIT FOR THE PERIOD | 91 | 71 | |||
Profit attributable to | (16) | ||||
non-controlling interests | (11) | ||||
PROFIT ATTRIBUTABLE TO THE | |||||
SHAREHOLDERS OF THE PARENT | 75 | 60 | |||
BASIC AND DILUTED EARNINGS | |||||
PER SHARE (EXPRESSED IN US$) | 0.02 | 0.02 | |||
Chairman | Deputy Chairman | Group Chief Executive Officer |
The attached notes 1 to 12 form part of these interim condensed consolidated financial statements.
3
Arab Banking Corporation (B.S.C.)
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Three-month period ended 31 March 2024 (Reviewed)
All figures in US$ Million
Reviewed
Three months ended
31 March
2024 2023
PROFIT FOR THE PERIOD | 91 | 71 |
Other comprehensive income (loss):
Other comprehensive income (loss)
that will be reclassified (or recycled) to profit or loss in subsequent periods:
Foreign currency translation: | |||
Unrealised loss on exchange translation in | |||
foreign subsidiaries | (155) | (27) | |
Debt instruments at FVOCI: | |||
Net change in fair value during the period | 39 | (28) | |
(116) | (55) | ||
Other comprehensive income (loss) that will not be | |||
reclassified (or recycled) to profit or loss in | |||
subsequent periods: | |||
Net change in fair value of FVOCI equity securities | |||
during the period | (2) | 4 | |
(2) | 4 | ||
Other comprehensive loss for the period | (118) | (51) | |
TOTAL COMPREHENSIVE | |||
(LOSS) INCOME FOR THE PERIOD | (27) | 20 | |
Attributable to: | |||
Shareholders of the parent | (28) | (1) | |
Non-controlling interests | 1 | 21 | |
(27) | 20 | ||
The attached notes 1 to 12 form part of these interim condensed consolidated financial statements. 4
Arab Banking Corporation (B.S.C.)
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
Three-month period ended 31 March 2024 (Reviewed)
All figures in US$ million | ||||
Reviewed | ||||
Three months ended | ||||
31 March | ||||
2024 | 2023 | |||
OPERATING ACTIVITIES | ||||
Profit for the period | 91 | 71 | ||
Adjustments for: | ||||
Credit loss expense | 36 | 43 | ||
Depreciation and amortisation | 16 | 14 | ||
Gain on disposal of non-trading debt investments - net | (10) | (4) | ||
Changes in operating assets and liabilities: | ||||
Treasury bills and other eligible bills | - | 38 | ||
Trading securities | (319) | (454) | ||
Placements with banks and other financial institutions | (177) | (431) | ||
Securities bought under repurchase agreements | 683 | 344 | ||
Loans and advances | (123) | 315 | ||
Other assets | (159) | (199) | ||
Deposits from customers | (742) | (1,251) | ||
Deposits from banks | 372 | 267 | ||
Securities sold under repurchase agreements | (1,111) | (909) | ||
Other liabilities | 22 | 173 | ||
Other non-cash movements | (100) | 397 | ||
Net cash used in operating activities | (1,521) | (1,586) | ||
INVESTING ACTIVITIES | ||||
Purchase of non-trading investments | (6,750) | (1,899) | ||
Sale and redemption of non-trading investments | 6,096 | 2,346 | ||
Purchase of premises and equipment | (5) | (20) | ||
Sale of premises and equipment | 1 | 5 | ||
Investment in subsidiaries - net | 3 | 2 | ||
Net cash (used in) from investing activities | (655) | 434 | ||
FINANCING ACTIVITIES | ||||
Issue (repayment) of certificates of deposit - net | 84 | (60) | ||
Repayment of borrowings | - | (43) | ||
Proceeds from borrowings | 100 | 42 | ||
Interest paid on additional / perpetual tier-1 capital | (9) | (9) | ||
Dividend paid to the Bank's shareholders | (70) | (46) | ||
Dividend paid to non-controlling interests | (8) | (7) | ||
Net cash from (used in) financing activities | 97 | (123) | ||
Net change in cash and cash equivalents | ||||
(2,079) | (1,275) | |||
Effect of exchange rate changes on cash and cash equivalents | (31) | (27) | ||
Cash and cash equivalents at beginning of the period | 4,466 | 2,848 | ||
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD | 2,356 | 1,546 | ||
The attached notes 1 to 12 form part of these interim condensed consolidated financial statements. 5
Arab Banking Corporation (B.S.C.)
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Three-month period ended 31 March 2024 (Reviewed)
All figures in US$ Million
Additional / | |
perpetual | |
tier-1 | |
Equity attributable to the shareholders of the parent | capital |
Other reserves | ||||||||
Foreign | ||||||||
exchange | Cumulative | Pension | ||||||
Share | Treasury | Statutory | Retained | General | translation | changes in | fund | |
capital | shares | reserve | earnings* | reserve | adjustments | fair value | reserve | Total |
Non- controlling interests
Total equity
At 31 December 2023
Profit for the period
Other comprehensive (loss) income for the period
Total comprehensive income (loss) for the period
Dividend**
Interest paid on additional / perpetual tier-1 capital
Other equity movements in subsidiaries
At 31 March 2024 (reviewed)
3,110
-
-
-
-
-
-
3,110
(6)
-
-
-
-
-
-
(6)
569
-
-
-
-
-
-
569
1,283
75
-
75
(70)
(9)
4
1,283
100
-
-
-
-
-
-
100
(1,126)
-
(140)
(140)
-
-
-
(1,266)
13
-
37
37
-
-
-
50
(33)
-
-
-
-
-
-
(33)
3,910
75
(103)
(28)
(70)
(9)
4
3,807
390
-
-
-
-
-
-
390
504
16
(15)
1
(8)
-
13
510
4,804
91
(118)
(27)
(78)
(9)
17
4,707
- Retained earnings include non-distributable reserves arising from consolidation of subsidiaries amounting to US$ 558 million (31 December 2023: US$ 555 million).
- A dividend of US$ 0.0225 per share (2022: US$ 0.015 per share) for the year 2023 was approved for payment at the Annual General Meeting held on 24 March 2024.
The attached notes 1 to 12 form part of these interim condensed consolidated financial statements.
6
Arab Banking Corporation (B.S.C.)
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Three-month period ended 31 March 2024 (Reviewed)
Equity attributable to the shareholders of the parent
Other reserves
All figures in US$ Million
Additional / | ||||
perpetual | Non- | |||
tier-1 | controlling | Total | ||
capital | interests | equity | ||
Foreign | |||||||
exchange | Cumulative | Pension | |||||
Share | Treasury | Statutory | Retained | General | translation | changes in | fund |
capital | shares | reserve | earnings* | reserve | adjustments | fair value | reserve |
Total
At 31 December 2022
Profit for the period
Other comprehensive (loss) income for the period
Total comprehensive income (loss) for the period
Dividend**
Interest paid on additional / perpetual tier-1 capital
Other equity movements in subsidiaries
At 31 March 2023 (reviewed)
3,110
-
-
-
-
-
-
3,110
(6)
-
-
-
-
-
-
(6)
545
-
-
-
-
-
-
545
1,125
60
-
60
(46)
(9)
4
1,134
100
-
-
-
-
-
-
100
(1,114)
-
(37)
(37)
-
-
-
(1,151)
(22)
-
(24)
(24)
-
-
-
(46)
(33)
-
-
-
-
-
-
(33)
3,705
60
(61)
(1)
(46)
(9)
4
3,653
390 | 426 | 4,521 | ||
- | 11 | 71 | ||
- | 10 | (51) | ||
- | 21 | 20 | ||
- | (7) | (53) | ||
- | - | (9) | ||
- | 2 | 6 | ||
390 | 442 | 4,485 | ||
- Retained earnings include non-distributable reserves arising from consolidation of subsidiaries amounting to US$ 519 million (31 December 2022: US$ 517 million).
- A dividend of US$ 0.015 per share (2021: US$ 0.01 per share) for the year 2022 was approved for payment at the Annual General Meeting held on 19 March 2023.
The attached notes 1 to 12 form part of these interim condensed consolidated financial statements.
7
Arab Banking Corporation (B.S.C.)
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
31 March 2024 (Reviewed)
All figures in US$ million
1 INCORPORATION AND ACTIVITIES
Arab Banking Corporation (B.S.C.) [the "Bank"] is incorporated in the Kingdom of Bahrain by an Amiri decree and operates under a wholesale banking licence issued by the Central Bank of Bahrain (the "CBB"). The Bank is a Bahraini Shareholding Company with limited liability and is listed on the Bahrain Bourse. The Central Bank of Libya is the ultimate parent of the Bank and its subsidiaries (together the "Group").
The Bank's registered office is at ABC Tower, Diplomatic Area, P.O. Box 5698, Manama, Kingdom of Bahrain. The Bank is registered under commercial registration number 10299 issued by the Ministry of Industry and Commerce, Kingdom of Bahrain.
The Group offers a range of international wholesale banking services including Corporate Banking & Financial Institutions, Project & Structured Finance, Syndications, Treasury, Trade Finance, Islamic Banking and the digital, mobile-only banking space named "ila Bank" within retail consumer banking services. Retail banking services are only provided in the MENA region.
2 BASIS OF PREPARATION AND CHANGES TO THE GROUP'S ACCOUNTING POLICIES
2.1 Basis of preparation
The interim condensed consolidated financial statements for the three-month period ended 31 March 2024 have been prepared in accordance with IAS 34 Interim Financial Reporting (IAS 34).
The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual consolidated financial statements as at 31 December 2023. In addition, results for the three-month period ended 31 March 2024 are not necessarily indicative of the results that may be expected for the financial year ending 31 December 2024.
2.2 New and amended standards and interpretations adopted by the Group
The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2023, except for the adoption of new and amended standards and interpretations that have become applicable effective from 1 January 2024. The Group has not early adopted any new and amended standard or interpretation that has been issued but is not yet effective.
Several amendments apply for the first time in 2024, but do not have an impact on the interim condensed consolidated financial statements of the Group.
_______________________________________________________________________________________
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Arab Banking Corporation (B.S.C.)
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
31 March 2024 (Reviewed)
All figures in US$ million
3 SUMMARY OF MATERIAL ACCOUNTING POLICIES
The accounting policies, estimates and assumptions used in the preparation of these interim condensed consolidated financial statements are consistent with those used in the preparation of the annual consolidated financial statements for the year ended 31 December 2023 except for adoption of new standards and amendments effective from 1 January 2024.
4 | NON-TRADING INVESTMENTS | |||
Reviewed | Audited | |||
31 March | 31 December | |||
2024 | 2023 | |||
Debt securities | ||||
At amortised cost | 6,304 | 5,977 | ||
At FVOCI | 5,681 | 5,458 | ||
11,985 | 11,435 | |||
ECL allowance | (87) | (88) | ||
Debt securities - net | 11,898 | 11,347 | ||
Equity securities | ||||
At FVOCI | 18 | 21 | ||
18 | 21 | |||
11,916 | 11,368 | |||
Following are the stage wise break-up of debt securities as of 31 March 2024 and 31 December 2023:
31 March 2024 (Reviewed) | |||||||
Stage 1 | Stage 2 | Stage 3 | Total | ||||
Debt securities, gross | 11,911 | - | 74 | 11,985 | |||
ECL allowance | (13) | - | (74) | (87) | |||
11,898 | - | - | 11,898 | ||||
31 December 2023 (Audited) | |||||||
Stage 1 | Stage 2 | Stage 3 | Total | ||||
Debt securities, gross | 11,361 | - | 74 | 11,435 | |||
ECL allowance | (14) | - | (74) | (88) | |||
11,347 | - | - | 11,347 | ||||
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ABC - Arab Banking Corporation BSC published this content on 12 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 May 2024 15:29:04 UTC.
