ABC's net profit declines 46.6% for first three quarters of 2002

Bahrain based Arab Banking Corporation's net profit declined 46.6%, from US $103 million in 2001 to US $55million, for the first three quarters of 2002, because of what the bank said, was the continued economic deterioration in emerging markets.

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By  Massoud Derhally Published  November 11, 2002

The Bahrain based Arab Banking Corporation (B.S.C.), the parent company of the Arab banking group, reported US $55 million net profit for the first three quarters of 2002, a decline of 46.6% from US$103 million posted the same period a year earlier, because of what the bank said, was the continued economic deterioration in emerging markets, particularly in Latin America.

“Turbulent market conditions have persisted throughout the year to date, depressing our results,” said Ghazi Abdul-Jawad, president and chief executive of ABC in a company statement. “In the near term therefore, we cannot expect to reverse the losses we have incurred in the emerging markets,” he added.

Total assets rose eight percent to $28.8 billion from $27.0 billion, while shareholders’ funds fell slightly to $1.90 billion from $1.91 billion.

Operating expenses remained reasonably steady at US$346 million (2001: US$342 million) whilst the overhead expense ratio increased to 64% (2001: 59%) mainly due to the decline in operating income.

Loan loss provisions for the first three quarters of 2002 were US $90 million against $61 million a year earlier, “reflecting the prolonged recessionary condition affecting global economies,” the bank statement said.

In September 2002, ABC pulled out of investing in stocks in the United States after incurring losses.

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