Bank of Sharjah posts Dh309m net profit
Bank of Sharjah has announced its audited results of the year ended December 31, 2020, with total assets standing at Dh36.14 billion, reflecting an increase of 14 per cent and total equity of Dh3.17 billion reflecting an increase of five per cent.
The group continues to enjoy a high asset quality and other robust metrics that remain healthy as a result of strict adherence to maintaining a disciplined and focused approach to lending, recovery and funding. The group also continues to also enjoy comfortable liquidity and a solid capital position with a customer deposit base of Dh23.67 billion, reflecting an increase of 11 per cent for the year, with a loans-to-deposits ratio of 82 per cent and a cost-to-income ratio of 61 per cent.
The net profit of the group’s UAE operations amounted to Dh309 million and prior to hyperinflation the consolidated net profit reached Dh176 million after considering the provisions needed for the Lebanese Subsidiary. Upon application of Dh842 million as hyperinflation effect plus other deductions the group recognised a net loss of Dh666 million and a total comprehensive loss of Dh724 million versus a positive equity component of Dh879 million.
The net audited effect of hyperinflation on the consolidated equity was positive and amounted to Dh236 million, representing the difference between Dh642 million negative variation on the P&L figures and Dh879 million positive variation on total equity. This has pushed the net equity of the group by Dh236 million to Dh3.365 million versus Dh3.018 million as at end 2019. However, in view of the prevailing uncertainty a Dh200 million additional provision at group level was booked reducing the hyperinflation difference to a mere Dh36 million and rendering the whole hyperinflation calculation and exploratory delays, to a futile exercise.
Sheikh Mohammed Bin Saud Al Qasimi, Chairman of Bank of Sharjah, stated that despite Covid-19 the bank performed exceptionally well and delivered positive and eloquent results that under hyperinflation accounting moved from P&L directly to equity. From the board of directors’ perspective protecting shareholders equity is the most important responsibility. Bank of Sharjah looks forward now to the quick convening of the general assembly and move with a new impetus towards releasing Q1 figures.
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