Bank of Sharjah 9 months profit at Dh379 million

Bank of Sharjah’s nine months profit demonstrated resilient performance underpinned by the robust fundamentals as net profit touched Dh 379 million against Dh172 million recorded in 2019.

The group’s balance sheet remains strong, with total assets standing at Dh34.77 billion as against Dh31.75 billion in 2019 reflecting an increase of 10 per cent and total equity of Dh3.27 billion, reflecting an increase of four per cent.

Asset quality and other metrics remain healthy as a result of strict adherence to maintaining a disciplined and focused approach to lending, recovery and funding.

The group continues to enjoy comfortable liquidity and a solid capital position with a customer deposit base of Dh23.25 billion (31 December 2019: Dh 21.33 billion) reflecting an increase of 9 per cent for the period, with a loans-to-deposits ratio of 84 per cent (31 December 2019: 83 per cent) and a cost-to-income ratio of 29 per cent (31 December 2019: 57per cent).

The group’s operations in Lebanon, through its subsidiary Emirates Lebanon Bank SAL (ELBank), have been witnessing unprecedented events stemming from political and economic turmoil since October 2019.

The group has complied with Banque du Liban (BDL) circular no. 13129, dated November 2019, calling for the increase by 20 per cent of the equity of Lebanese banks prior to 30 June 2020. It is important to stress that the operating income before impairments of ELBank remains in line with last year’s comparable period results.

However, the group has been compelled to retroactively register expected credit loss (ECL) figures in the Q1 2020 financial results based on an extremely conservative assessment for determining and recognizing all ECLs during the first half of 2020, despite the fact that the group had already taken the initiative of raising the needed ECL in Q3 as a result of the massive explosion in Beirut on August 2020. This has created a distortion between the results in the first half of the year and what was booked internally in Q3 financials, with a resulting increase in the levels of the group’s capital adequacy ratios. — business@khaleejtimes.com