MANAMA: Ithmaar Bank, a Bahrain-based Islamic retail bank, expects to return to profitability this year, chief executive Ahmed Abdul Rahim said yesterday.

He told the GDN that efforts to turn the group around are paying off, as is evident from the growth in the operating profits of 14 per cent last year.

Mr Abdul Rahim was speaking on the sidelines of the bank’s annual general meeting (AGM) held at the Ramee Grand Hotel, Seef.

Net loss last year of $15 million, after impairment provision and taxation, is significantly lower by 81pc when compared with $80.3m in 2013, he said.

Net profit before the impairment provision and taxation was $28.9m last year as against $4.8m for 2013.

The chief executive said key initiatives were taken last year aimed at turning the group around by “significantly transforming operations, increasing revenue, improving margins, divesting non-core assets and reducing costs.”

“Ithmaar Bank’s financing business in Bahrain increased by 23pc, from $745m at the end of 2013, to $914m at the end of last year,” he said.

Growth was driven mainly by home financing which increased by 53pc and personal financing which increased by 21pc.

Similarly, total customer current accounts, savings accounts, Thimaar and unrestricted investment account deposits, increased by 11pc from $1.38 billion at the end of 2013, to $1.54bn at the end of last year, he said.

Earlier, Ithmaar Bank chairman Prince Amr Al Faisal told shareholders that the improved financial performance was mainly due to sustainable growth in core retail banking operations, evident in growth of operating income which increased by 14pc to $227.7m from $199.9m in 2013.

“Despite growth in business, total expenses for the year at $198.8m are under control and are 1.9pc higher than 2013 expenses of $195.1m,” he said.

Total assets increased by six per cent to $7.86bn as at December 31, when compared with $7.4bn as at December 31, 2013.

“The increase in customer balances reflects growing customer confidence as well as demand for products and services,” he added.

At the AGM, shareholders also voted to adopt the proposed Staff Variable Remuneration Policy Framework, which was developed to comply with the Sound Remuneration Practices issued by the Central Bank of Bahrain.

avinash@gdn.com.bh