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29 March 2024

BoS profit drops 18% to Dh125m

Bank of Sharjah branch at Sharjah bank street. (FILE)

Published
By Staff

Bank of Sharjah (BoS) said its profits in the first half of 2012 dropped 18 per cent to Dh125 million as compared to Dh152 million for the same period last year due to increased operating expenses and lower non-interest income.

The bank’s H1 2012 operating profit fell 17 per cent to Dh134 million against Dh161 million in H1 2011. Operating expenses increased eight per cent to Dh101 million in the first half of this year.

The bank said Euro Zone debt crisis and the continued concerns about the global economy weighed heavily on the international and local stock markets. This led non-interest income to decline by 31 per cent – despite the seven per cent improvement in the commission and fees income during the period – which was reflected in the overall five per cent slump in total income.

Total assets reached Dh21 billion in line with the December 31, 2011 figure of Dh20.9 billion.

The bank continued to increase its deposits base which reached Dh15.031 billion as of June 30, 2012, a slight increase of one per cent over the December 31, 2011 figure of Dh14.94 billion.

Loans and advances reached Dh12,049 million comparable to the December 31, 2011 figure of Dh12,039 million.

Loans-to-deposits ratio further improved during the period to 0.80 in June 2012 from 0.81 in December 2011.

Shareholders’ equity at the end of the first half stood at Dh4,019 million, a four per cent decline compared to the December 31, 2011 figure of Dh4,199 million. This was mainly caused by the additional shares acquired through the share buyback during the first quarter of the year, in addition to the dividend distribution on the 2011 profits.

In light of the continued challenging economic environment, the bank pursued its prudent policy of raising further general provisions. During the second quarter of 2012, the bank has set aside Dh30 million of such provisions, bringing the charge for the period ending June 2012 to Dh91 million, similar to the 2011 corresponding period. As such, the bank’s collective impairment provision balance as of June 30, 2012 stood at Dh636 million.