Bahrain-headquartered BBK Q1 2021 reports net income of BHD14.3m ($37.9m) down by 16.4% year-on-year.

The net profit decline is largely impacted by a decrease in net fees and commission income by 42.9% to BHD3.6m. This results from the impact of new regulatory caps on fees and charges. New regulations apply from around mid-2020 on retail banking and credit card business.

In addition, BBK’s profits from associated companies declines from a profit of BHD0.8m to a loss of BHD 1.4m. This is largely due to the adverse impact of the pandemic on the financial performance of the bank’s JV’s. On the other hand, BBK reports a number of positive metrics for the quarter to end March 2021.

BBK Q1 2021 positive metrics

For example, investment and other income rises by 31.8% y-o-y to BHD5.8m. Moreover, the bank is weathering ongoing margin pressure. Net interest income dips down only marginally from BHD21.0m to BHD20.9m.

Furthermore, BBK reports success in cost control. Specifically, operating costs are down by a robust 10.9% y-o-y to BHD14.7m.

Total assets inch down by 0.5% y-o-y to BHD3.74bn. Meantime, net loans and total customer deposits both rise slightly, by 0.6% and 1.1% y-o-y respectively.

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The BBK loans to deposits ratio of 71.4% in the first quarter compares with 71.8% in the prior quarter.

AbdulRahman Saif, BBK’s Group Chief Executive says: “The challenges posed by the pandemic continued to adversely impact various economic sectors. This includes the banking sector. In BBK, we vigorously adopted various measures to enhance our resilience and efficiency to adapt the new challenges.

“Solid cost and risk discipline and exceptional client relationship management enables us to continue to generate attractive returns for shareholders Preserving robust capital and liquidity enables us to continue supporting our customers, and positions BBK for further future success.”

In fiscal 2020, BBK ranked the 6th largest bank in Bahrain by assets behind Ahli United, Arab Banking Group, Gulf International Bank, Albaraka Banking Group and National Bank of Bahrain.