Bank of Sharjah on Thursday announced a nine per cent rise in net income to Dh277 million for the year ended December 31, 2012.
Total assets reached Dh22,859 million, 9 per cent above the December 31, 2011 figure of Dh20,934 million.
The bank continued to grow its deposit base which reached Dh16,476 million as of December 31, 2012, 10 per cent over the December 31, 2011 figure of Dh14,940 million.
Loans and advances reached Dh12,473 million, four per cent above the December 31, 2011 figure of Dh12,039 million.
The continued increase in deposits over loans and advances has enhanced the loans-to-deposits ratio which further improved during the year to 0.76 in December 2012 from 0.81 in December 2011. This led to the 26 per cent surge in net liquidity which reached Dh6 billion by the end of 2012 compared to Dh4.8 billion at the end of 2011.
The 6 per cent decline in net interest income was mainly driven by the 10 per cent increase in deposits, in addition to the excess liquidity which is placed at extremely low interbank interest rates.
The 11 per cent increase in non-interest income was driven by the improvement witnessed in the financial markets during the last quarter of the year.
The collective impairment provision for the 2012 year has declined against a backdrop of an improved economic environment and the overall performance of the credit portfolio. During the year, the bank has set aside Dh115 million of such provisions, raising the bank’s cumulative balance of collective impairment provision to Dh658 million.
All the above led to the 9 per cent increase in the current year net profit to reach Dh277 million versus Dh254 million for the year ending December 31, 2011. As a result, earnings per share for the year gained 20 per cent and reached 13.5 fils compared to 11.2 fils in 2011.
Total comprehensive income grew by 13 per cent to reach Dh273 million versus Dh242 million in 2011 on the back of the improvement in the financial markets.
During the past year, the bank expanded its Private Banking Wealth Management (PBWM) division in collaboration with Commerzbank International S.A. Luxembourg. A new branch was also opened in Dubai Media City and work is underway to open a branch in Mussafah, the industrial area of Abu Dhabi.
Commenting on the results, Varouj Nerguizian, the bank’s executive eirector and general manager, said: “The 2012 results affirmed the solid structure of the bank’s balance sheet. The bank’s ample liquidity in addition to its expansion strategy will competitively position the bank and allow it to take full advantage of the positive developments in the economical scene of the UAE.
“While profitability improved by 13 per cent, it remained subdued by across the board application of new regulatory guidelines geared more towards retail activity than the corporate model of the bank. The real potential of Bank of Sharjah will be revealed by a number of positive developments in strategic investments during 2013-2014.”
Follow Emirates 24|7 on Google News.