Bank of Sharjah announces Q3 results
Net profit touches AED 247 million
Bank of Sharjah announced the results of the third quarter of 2007, which showed continued sustained growth in the core banking activities.
Net interest income for the period ending September 30, 2007, was AED 168 million – a 50 per cent increase over last year’s figure. Moreover, net fees and commission income increased by 81 per cent to AED 107 million for the same period. Net income for the period ending September 30 2007, was AED 247 million, 7 per cent lower than last year’s figure due to the decline in investment income, as a result of the softening of the UAE financial markets.
On the other hand, the Board took note of the improvement witnessed by the UAE financial markets subsequent to the balance-sheet date and its substantial positive impact on the bank’s earnings.
The outstanding performance in the core banking activities was driven by the increase in the loans and advances portfolio, in addition to the trade finance activity. Loans and advances grew by 41 per cent compared with year end figures and 54 per cent compared with the same period of last year.
The solid growth in the bank’s commercial activity resulted in an impressive 43 per cent increase in off balance sheet financing which reached AED 5.4 billion against AED 3.8 billion as of December 31, 2006. This robust growth in the core banking activities was translated into an overall 18 per cent increase in total assets which reached AED 8.8 billion compared to AED 7.5 billion for the same period of last year, and a 4 per cent increase over the AED 8.5 billion balance as of December 31, 2006.
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Deposits registered an increase of 17 per cent for the period ending September 2007 compared with the same period of last year. This surge has reduced the deposit downturn to 3 per cent since December 31, 2006.
During the third quarter, the Al Ain Branch started operations increasing the bank’s branch network in the country to four. This new initiative falls within the bank’s expansion strategy to tap into new growing markets in the country, and support its clients’ activity.
On July 4, 2007, Bank of Sharjah completed the acquisition of Banque de la Bekaa SAL, a Lebanese bank. The operations of the acquired bank have been fully transferred to its previous owner Fransabank. The acquisition provides the bank with a license to carry out a wide range of banking activities.
Bank of Sharjah intends to use Lebanon as a platform to launch its banking operations in the Levant. This will gradually help the bank to strengthen and build its franchise throughout the Middle East.
During the third quarter, the bank received the proceeds of the US$200 million syndicated loan which was signed prior to the sub prime crisis and the crunch in the credit markets at a very favourable rate.
The bank’s debut facility was extremely well received by the international markets and enjoyed an oversubscription of 72 per cent over the launch target. The transaction was subscribed to by 27 banks from 16 countries, highlighting the bank’s financial strength (Rating of A-) and reputation across all regions.
