Bank of Palestine Group announces FY 2017 Preliminary Financial Results
7 | 2 | 2018
Net Profit of USD 54 million is recorded with an outlook for enhanced operations across new Bank of Palestine Group Companies
Board of directors recommended distribution of USD 27 million in cash dividends for the year 2017
Preliminary Financial Results Highlights
- Profit before tax up by 7.33% with USD 72.98 million compared with USD 67.99 million in the same period of 2016.
- Net profit of USD 54 million for FY 2017 with a 1.80 % increase compared to USD 53 million for the same period in 2016.
- Gross Income of USD 220 million for Q4 2017, up by 24.48%, compared with USD 177 million for the same period in 2016
- Total assets up by 18.53% at USD 4.88 billion compared with USD 4.12 billion at the end of 2016
- Loans at USD 2.52 billion, up by 13.79% compared to USD 2.21 billion at the end of 2016.
- Customer deposits at USD 3.77 billion, up by 19.90% from USD 3.14 billion at the end of 2016
- Total shareholders' equity reached USD 449 million, an increase of 11.49% compared with USD 403.57 million at the end of 2016.
- Consolidated NPL Ratio at: 2.66% %
Ramallah, Palestine (February 6th , 2017): Bank of Palestine Group (BOP), announced its FY 2017 preliminary financial consolidated results reporting a gross income of USD 220,934,607 in 2017, compared with USD 177,484,615 in 2016, reflecting an increase of 24.48%. The bank’s Profit before tax is up by 7.33% with USD 72,983,244 compared with USD 67,999,090 in 2016, with a net profit achieved of USD 54,008,928. Total assets grew by 18.53% reaching USD 4,884,822,851 compared with USD 4,121,322,946 at the end of 2016. The Bank’s total shareholders' equity reached USD 449,961,687 with an increase of 11.49% compared with USD 403,574,797 at the end of 2016.
During a meeting of the Board of Directors of Bank of Palestine (BoP), the board announced the holding of its Ordinary and Extraordinary Annual General Assembly Meeting (AGM) on 29th of March, 2018 in Ramallah, and via video conference in Gaza. The board recommended to the AGM distribution of USD 27 million in cash dividends for the bank’s profits in 2017, a percentage of 13.5 % of the bank’s paid up capital.
Commenting on the results, Mr. Hashim Shawa - Chairman of Bank of Palestine Group said: “Despite operating challenges in 2017 in the market place, Bank of Palestine Group maintained a stable organic growth with a conservative approach in order to cushion for future uncertainties. However, we enter the year 2018 with the bank's new organizational structure, which is deemed important for maintaining a modernized banking corporate governance and more focus on operational performance of the bank of Palestine group as a whole. By separating the posts of Chairman and General Manager at the bank coupled with efforts to centralize operations and the appointment of new senior management at group companies, we shall be able to fully utilize the group companies' strengths in order to maximize synergies, economies of scale and core competencies to grow value across all operations."
Mr. Shawa added; "As part of Bank of Palestine Group new vision we have a strategic direction for Arab Islamic Bank Subsidiary with an increased capital base to USD$75 million providing ample adequacy for growth in the Islamic banking operations. We will see the benefits of this expansion strategy in years to come despite short-term increase in expenses and our cost to income ratio. Continued investment in electronic banking channels and digitization both at the bank and in our Fintech subsidiary Palpay will benefit tremendously with the advent of 3G services first quarter 2018. Al Wasata Brokerage firm has witnessed a capital increase to allow its license to include asset management and portfolio investment management as well. All of this is projected to be contributing positively to the group's diversified income base."
Other Milestones in 2017 witnessed the Chile Representative Office entering operations in November 2017 a step which has enabled tapping the diaspora potential in the Latin America region and bridging opportunities with the Dubai Representative Office and Palestine head office. The appointment of an independent Board Member nominated by strategic Shareholder IFC with credentials in international finance is timely as bank looks forth for regional and international expansion across diaspora markets and continents.
The latest branch opening in Dahiet Al Bareed - East Jerusalem is equally heralded as important for entering an unserved banking market of a population size of 380,000 people in the city and governorate of Jerusalem where no Palestinian bank was present since 1967.
Growth was witnessed in customer deposits, loans, assets with a healthy capital adequacy for the bank at 14.55%. With a Loan to deposit ratio of 66.83% Bank of Palestine continues to have a strong liquidity position for further lending following a diversification and segmentation strategy including retail campaigns.
"Bank of Palestine specific new business model will also enhance the lean efficiency mode of the bank with centralization of operations, cost cutting and operational synergies. Our continued focus on financial and non-financial advisory for financial inclusion of women and youth with a new class of the Mini MBA graduating end of 2017 as a proof point of adhering to the growth strategy that has worked in past years to continue serving more than 50% of the unbanked population of Palestine. Our underway segmentation strategy saw implementation in last quarter 2017 with additional focus on retail business strategy; SME platform in mobile banking that would benefit SMEs, and Customer Relation Managers for corporates and international organizations. Such direction will carry us forth into 2018 despite external operational challenges. We are factoring in a vigilant approach to cushion against some external operational challenges such as new tax imposed on income of operations in Gaza starting from January 2017 and the fact that paid Interest rates have increased dramatically in the local market which affected cost of funds and squeezed Bank's net interest margins. Nevertheless, we have maintained stable growth and are moving forward across all operations prudently", commented Mr. Rushdi Ghalayini, General Manager Bank of Palestine.
Customer deposits reached USD 3,768,631,970 in 2017, marking an increase of 19.90% compared with USD 3,143,151,591 at end of 2016. The loan portfolio increased to USD 2,518,590,540 compared to USD 2,213,463,765 at the end of 2016 with a growth of 13.79%. In tandem with the growth in the Bank's loan portfolio, the bank is keeping a very acceptable Non-Performing Loan Ratio at around 2.66% while sustaining such stable organic growth.
About Bank of Palestine (BOP)
Bank of Palestine has a long embedded presence and experience in Palestine dating back to 1960. Bank of Palestine is constantly growing to be financially inclusive, and socially responsible at the cutting edge of global financial practice and innovation. The bank has the most widespread branch network in Palestine (70 branches), a paid up capital of $200 million, and assets of over USD 4.88 billion, with 1,706 employees serving more than 890,000 customers. BOP is engaged in retail, corporate, micro & SME, and Diaspora banking operations. BOP is the sole agent for issuing and acquiring Visa and MasterCard in Palestine with over 6,600 Point of Sale merchant terminals nationwide. BOP is involved in large project finance loan syndications. It adopts a holistic sustainability strategy; and has as such worked with the International Finance Corporation (IFC) to develop a stringent risk management & governance structure. BOP has been the leader in Corporate Social Responsibility (CSR) in Palestine dedicating 6% of its net profit to community & human development.
Bank of Palestine’s stock (PEX: BOP) has been listed on the Palestine Exchange (PEX) since 2005. It is among the market’s blue chip stocks, and represents more than 13.62% of total PEX market capitalization.
PalPay® – Palestine Payments – As the leading payment platform company PalPay has been successful since inception utilizing the many POS machines and enabling payment of bills from various outlets revolutionizing the payment systems in Palestine. The number of electronic transactions conducted during the year through PalPay® reached more than 14.4 million, an increase of 26% compared with 2016. The company also continued to sign agreements with additional utility companies in Palestine to allow their clients to make e-payments through the PalPay® system. PalPay® has raised to 65 entities the number of service customers using its platform. The company also promoted its services regionally, as it was one of the main sponsors of the Cards and Payments Middle East conference that took place in Dubai. PalPay also was proudly the winner for the biggest worldwide contest in the field of “crisis management and aid” launched by Citi bank (MasterCard, Facebook, Microsoft, IBM and others) . PalPay E-Voucher and cash assistance Platform won the first place in the Citi Tech for integrity challenge; a global competition among 2000 international companies, where 103 finalists representing 25 countries vied for awards at six Demo Days. Overall, applicants came from more than 70 countries and 300 cities.
Al-Wasata Securities has been the fastest growing brokerage company in Palestine playing a major role in the acquisition of new investors into the Palestinian market. The company ranked number one (out of eight brokerage companies) in Palestine with respect to attracting new investors. It now has a 26.83% market share in terms of number of investors, USD 180 million trading volume in local & regional markets, and more than USD 486 million worth of shares under management.
Arab Islamic Bank (AIB), is the latest subsidiary addition to Bank of Palestine Group, and in essence is the Islamic banking arm for Bank of Palestine, allowing it to provide with its 18 branches Islamic Banking solutions to a growing segment of customers requiring such sharia’ compliant solutions. The bank has assets of USD 1,033,012,286, with net profits in 2017 of USD 6,402,924. Benchmarked against the banking sector AIB’s assets grew by 30% while the assets growth in the entire banking sector was 10% clearly indicating the potential for growth for AIB in the coming years. AIB AGM approved a capital raise in 2017 to meet its growth potential.