Venture Capital Bank reports net profit of US$ 9.3 Million for year ended 30 June 2016
Venture Capital Bank BSC (c) (VCBank) reported a net profit of US$ 9.3 million for the year ended 30 June 2016 compared to US$ 14.1 million for the previous year, representing a decrease of 34% over the prior year. In the last quarter of the financial year the Bank earned a net profit of US$ 16 million, compared to US$ 12.1 million in the corresponding quarter in the prior year, representing an increase of 32%. The results mark a sustained period of almost five years of excellent performance by the regional investment bank, with a demonstrable commitment to ethical banking and strong corporate governance.
Total revenue more than doubled to US$ 36.6 million compared with US$ 16.5 million the previous year, while total expenses increased 28% to US$ 16.2 million versus US$ 12.6 million for FY 2015. Net income from investment banking activities was the largest contributor to this growth at US$ 31.1 million compared with US$ 13.7 million a year earlier. These results are after recognising fair value losses and impairment provisions of US$ 20.5 million, which were booked based on investment valuations and impairment assessments which are conducted periodically.
Total balance sheet assets amounted to US$ 334.3 million as at 30 June 2016 compared with US$ 250.8 million at the end of the previous year, representing a growth of 33%, and shareholders' equity stood at US$ 224.3 million versus US$ 219.5 million at the end of FY 2015, a growth of 2.2%. The capital adequacy ratio was 19.8 per cent, higher than the 12.5 per cent minimum requirement of the Central Bank of Bahrain. Total fiduciary assets under management increased to US$ 1.16 billion as at 30 June 2016 compared with US$ 1.02 billion at the end of the previous year, a growth of 13.7%.
Announcing these strong results, the Chairman of the Board of VCBank, Mr. Abdulfatah Marafie, commented: "I am pleased to report that, with the grace of God, we maintained the Bank's recent trend of profitability, and continued to grow our investment activities. Significantly, this was achieved against another challenging period of intense economic volatility and market uncertainty.
VCBank continues to rank among the most active investment banks in the region, with a strong pipeline of deals and proposed exits. Such encouraging progress could not have been achieved without the continued loyalty of our shareholders and clients, along with the strategic guidance of our Board of Directors and Executive Management, together with the professionalism of our investment and wealth management teams, and the dedication of our corporate support functions."
"Looking ahead, fiscal year 2017 will be another highly-challenging year, marked by continued oil price and market volatility; further economic and fiscal reforms by MENA governments to diversify revenues; and continued geo-political turmoil in certain parts of the region. However, based on our strong financial and business performance in FY 2016, we have a cautiously optimistic outlook for VCBank in the immediate future," added Mr. Marafie.
Commenting on the results for the year, Board Member and Chief Executive Officer, Mr. Abdullatif Mohamed Janahi, said: "These financial results prove the success of our business activities during the year. In particular, net income from investment banking activities grew substantially to US$ 31.1 million from US$ 13.7 million in FY 2015, reflecting a particularly busy and successful year in terms of investment transactions. VCBank structured, offered and placed four new investments in FY 2016 with a total capital raising of approximately US$ 200 million from investors which included initial forays into the US multifamily housing sector and the Turkish café / patisserie market. We expanded within the regional and global markets, and have further strengthened and diversified our investment portfolio by offering clients innovative and attractive investment opportunities. In addition, we concluded two investment exits, including VCBank's first full private equity exit. At the same time, we made sound progress with several of our key existing investments."
"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.