Venture Capital Bank Achieves US$ 11 Million Net Profit and Recommends 8.5% Bonus Shares to Its Shareholders
Venture Capital Bank B.S.C. (c) (VCBank), announced that the Bank reported a net profit of US$ 11 Million for the year ended 31 December 2009, compared to US$ 47 Million last year. The total income reached US$ 3 2 .4 Million, while it was US$ 82 Million last year. The net profit for the last quarter of 2009 was US$ 1.7 Million compared to US$ 8 Million for the same period last year. The results were announced following a meeting for the Board of Directors of the Bank, where the financial results for 2009 were approved.
Commenting on the results, Dr. Ghassan Ahmed Al Sulaiman, Chairman of VC Bank, said "The world witnessed unprecedented economic and financial challenges during last year, but with the blessings of God, the Bank was able overcome these challenges with high efficiency and superior stable and positive performance. Characterized by, and continued investments and projects to achieve good results, while our investments and projects continued to achieve positive results and the bank continued strengthening its institutional capabilities, and completed the second process to increase the bank's capital, with considerable success.
"During 2009, VCBank managed to realize good and positive financial results in comparison with the prevailing market conditions. Net profits reached to US$ 11 million and achieved a return on equity of 5.4 per cent for 2009, keeping in mind the increase in the Bank's capital. The Bank has consistently returned net profits since its inception in 2005, which is an excellent performance for a young investment bank, particularly given the turmoil experienced from the start of the current financial crises beginning in September 2008. Furthermore, our balance sheet has grown from a modest base of US$ 66 million at inception to a total balance sheet size of US$ 360 million now; an increase of 5. 4 times since inception and of 48% over last year. In addition, off balance sheet fiduciary assets have grown from zero at inception to US$ 672 million as at 31 December 2009. This track record is further corroboration of VCBank's status as the first Islamic investment bank specializing in venture capital investments in small and medium businesses (SMEs) in the MENA region" he added.
The total income, for the period ended 31 December 2009, reached US$ 3 2 .4 Million, while the total expenditures for the period was US$ 2 1 .4 million, an outstanding performance in the fourth operational year for the Bank. The total assets of the bank as of 31 December 2009, were US$ 35 6 Million, while total shareholders' equity before allocations was US$ 286 million. The Bank maintained a high rate of liquidity in short-term bank Murabaha with specialized banks in this field. VCBank have high capital adequacy, which is higher than the minimum requirements by the Central Bank of Bahrain's 12%.
The Board of Directors raised a recommendation for General Assembly approval to distribute 8.5% Bonus Shares to the Bank's Shareholders.
From his side Mr. Abdullatif Mohammed Janahi, Board Member and VCBank CEO, said "With the continuous difficult economic conditions and operating environment which imposed a myriad of challenges during the year 2009, VCBank relentlessly continued its successful progress toward realization of its vision to become the leading regional Islamic venture capital investment bank. In the light of the negative consequences of the global financial downturn, VCBank continued to embrace a conservative and balanced approach to enter into new investments and focused on profitable projects to ensure realization of its objective both to add value to the shareholders and investors and contributing to Bahrain's economic and social development."
During 2009, VCBank launched the Royal Maternity Hospital, an innovative project focused in the premium health care segment. We remain focused on the MENA region, targeting sound and yielding private equity opportunities from sound and well-managed small-to medium enterprises (SMEs). The Bank also initiated an innovative Liquidity Program totaling USD 55 million comprising Shari'ah compliant Certificates structured in connection with the exit of its Venture Logistics Properties investments, which has been exited at excellent return on Investment of 138% and 82% and an IRR (Pre Performance Fee) of 35% and 27% for the investors".
VCBank conducted during 2009, several deals that enhanced our current investment portfolio. VCBank has successfully signed a partnership agreement with Dutch Delight, a Bahraini company specializing in the production of high quality handmade chocolates, which is a clear validation of VCBank's business model to invest in small and medium-sized companies, which represents a large and effective part of the global economy. The Bank also organized several forums and seminars for entrepreneurs in the Kingdom of Bahrain, to introduce them to Bank's role and Bahrain VC Fund.
Moreover, Jordan Al Abyad Fertilizers and Chemicals Company (JAFCCO) received a syndicated financing facility of USD45 million managed and lead by Jordan Ahli Bank to further finance the work in progress of its industrial complex to manufacture fertilizers and chemicals. Challenger Ltd. Received a USD 60 million working capital facility with Natixis,a European bank specialized in the oil and gas sector, which will provide further financial strength for expansion. One of 2009 achievements, VCBank received approval from the Capital Market Authority of the Kingdom of Saudi Arabia to establish the Saudi Venture Capital Investment Company. VCBank also announced the completion of the German Orthopaedic Hospital in Bahrain, which represents a state of art medical facility specializing in the provision of orthopaedics healthcare and is operated by world renowned orthopaedic surgeons and medical staff from the Federal Republic of Germany, and provide an effective local and regional alternative to medical tourism destinations, particularly Europe" added Mr. Abdullatif.