BoS net drops 45% to Dh216m

 Total assets reached Dh21,507m, an increase of 7 per cent over the corresponding September 30, 2010 figure of Dh20,095m. Total assets registered a 4 per cent increase over the December 31, 2010 balance of Dh20,618m. The increase in total assets was mainly driven by an increase in customer deposits.

 

Over the last year, Bank of Sharjah has successfully managed to substantially increase its deposits base. Total deposits reached Dh15,685m as of September 30, 2011, an increase of 14 per cent over the corresponding September 30, 2010 figure of Dh13,709m. Compared to the December 31, 2010 figure of Dh14,377m, the increase in deposits was 9 per cent.

 

The bank’s loans and advances reached Dh12,775m, an increase of 6 per cent over the corresponding September 30, 2010 figure of Dh12,107m. The increase over the December 31, 2010 figure of Dh12,107m was also 6 per cent.

 

The continuous increase in deposits over loans and advances has significantly enhanced the bank’s loans-to-deposits ratio which further reduced during the period to reach 0.81 in September 2011, from 0.84 in December 2010 and 0.88 in September 2010.

 

The bank’s equity at the end of the this period stood at Dh4,220m, comparable to the corresponding September 2010 figure of Dh4,231m and 4 per cent below the December 31, 2010 figure of Dh4,395m. The decline from the December figure was mainly due to the exercise of share buy back; during this period the bank has acquired more than 97.2m shares worth Dh175m.

 

Compared to the corresponding period of 2010, net liquidity surged by 32 per cent during this period of 2011. As of September 30, 2011, net liquidity stood at Dh5,117m versus Dh 3,874m as of September 30, 2010. When compared to the December 31, 2010, figure of Dh4,682m, net liquidity also increased by 9 per cent.

 

This improvement in liquidity, which was driven by the 14 per cent increase in deposits, led to a 10 per cent drop in net interest income, due to the depressed interbank interest rates.

 

In view of the slower than expected recovery in the UAE economy and because of the new risk classification measures introduced by the UAE Central Bank, the bank constituted Dh40m of collective impairment provisions during the third quarter of 2011. As of September 30, 2011, the bank’s collective impairment provisions reached Dh472m, of which Dh130m were constituted during 2011 versus nil in the corresponding period of 2010; this caused a 45 per cent decline in the current year net income and in turn led to a drop in the earnings per share figure.