Venture Capital Bank reports net profit of US$ 14.1 Million for year ended 30 June 2015
Venture Capital Bank BSC (c) (VCBank) reported a net profit of US$ 14.1 million for the year ended 30 June 2015 compared to US$ 14.6 million for the previous year and a return on net paid-up capital of 7.8%. The announcement was made following clearance by auditors Ernst & Young, and approval of the audited financials by the Board of Directors. The results mark a sustained period of almost four years of excellent performance by the regional investment bank, with a demonstrable commitment to ethical banking and strong corporate governance.
The Bank reported a net profit of US$ 14.1 million from total income of US$ 30.9 million for the year compared with a profit of US$ 14.6 million from total income of US$ 28.6 million for the prior year ended 30 June 2014. Net profit and total revenue for the final quarter ended 30 June 2015 amounted to US$ 12.1 million and US$ 17.9 million respectively compared to $ 9.3 million and $ 13.9 million respectively for the comparative quarter ended 30 June 2014. These results are after recognition of fair value losses and impairment allowances totaling US$ 6.7 million in the year ended 30 June 2015 (fair value losses and impairments of US$ 4.6 million in the year ended 30 June 2014).
Total balance sheet assets at 30 June 2015 amounted to US$ 251 million, with the balance sheet remaining unleveraged; while shareholders' equity grew by approximately 2% to US$ 219.5 million at 30 June 2015 compared to US$ 216 million at 30 June 2014. Total assets under management increased by 2.5% to US$ 1.27 billion compared to US$ 1.24 billion as at 30 June 2014. The Bank's capital adequacy ratio stands at a very robust 36.9%, considerably higher than the minimum requirement of the Central Bank of Bahrain of 12.5%.
Announcing these excellent results, the Chairman of the Board of VCBank, Dr. Ghassan Ahmed Al Sulaiman, highlighted the significance of the rebound in profitability by the Bank, and the strong contribution from investment banking activities which remains the bedrock of the Bank's performance. "These encouraging results have been achieved despite the very challenging conditions in the region and the investment banking sector. They confirm the success of our plans and strategies that included an organisational restructuring and a refocusing on growth sectors, both regionally and globally. Additionally, they support and confirm our commitment to provide shareholders and investors with acceptable rates of return.
"It also gives me great pleasure to mention that VCBank celebrates its' 10th anniversary in 2015, which marks a significant corporate milestone. Underlying these achievements, the Bank was named ‘Best Islamic Investment Bank 2015' by the Global Islamic Finance Awards; and was ranked in the top five Islamic financial institutions in the GCC, according to the Financial Disclosure Index of the World Islamic Banking Conference Leaderboard," added Dr. Al Sulaiman.
Commenting on the results for FY 2015, Board Member and Chief Executive Officer, Mr. Abdullatif Mohamed Janahi, said: "VCBank enjoyed one of its busiest years for investment banking activity through the offering of a number of new investments, with a total capital raising of approximately US$ 160 million from investors. In the first deal, the Bank structured and advised on a GBP 30 million transaction for a select group of investors to acquire 24 Buckingham Gate, a prime freehold residential site under redevelopment in London's prestigious SW1 postcode district. Another transaction involved the acquisition of a 45 per cent stake in Delta Company Limited, a leading Saudi-based contractor specialising in electrical power, transmission and distribution. A significant success was the partial exit of the Jebel Ali Labour Accommodation complex through the launch of the Bank's second short-term Liquidity Programme of US$ 59.5 million, which is backed by the two completed and fully-leased buildings of the complex. Furthermore, we successfully executed the revival of the Difaaf Development project at Reef Island in Bahrain, through a capital increase of US$ 18.75 million.
"The conclusion of a number of solid deals during the year has strengthened our current investment portfolio, and boosted our market reputation for attractive and innovative investment offerings. The Bank is also on target to achieve further improvements in revenue growth and reduced operating costs. This is in line with our strategy that focuses on generating and sustaining profitability, maintaining adequate liquidity, and building a solid foundation for providing acceptable returns to our shareholders," he added.
"These positive results are testimony to the Bank's high standards of corporate governance and the effectiveness of its investment strategy. VCBank has an investor base that remains immensely supportive. We are confident that VCBank will be able to continue to build on this excellent performance in the future with the guidance and support of the Central Bank of Bahrain and the Board of Directors; and by continuing to adapt and capitalise on changes and opportunities in the market," concluded Mr. Janahi.