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SICO net profit surges 112pc.

MANAMA: Bahrain-based regional investment bank Securities and Investment Company (SICO) posted a 112 per cent increase in net profit for the first half of the year.

Net profit increased to BD1.06 million ($2.8m) in the first half from BD499,000 in the same period last year.

Basic earnings per share rose to 2.48 fils from 1.17 fils during the same period.

Operating income for the first half rose to BD3.4m from BD2.71m made during the corresponding period last year.

For the second quarter, operating income was BD859,000 compared with BD2.25m for the corresponding period last year.

Net earnings were negative with a loss of BD292,000 registered as against a profit of BD1.13m made last year.

Basic earnings per share stood at negative 0.68 fils as against 2.64fils for last year's second quarter.

Net interest income, net fee, commission income, brokerage and other income during the second quarter contributed BD274,000, BD554,000 and BD233,000 respectively to the operating income.

Conversely, the firm recorded a net investment loss of BD202,000, which negatively impacted its operating income.

Total operating expenses for the period amounted to BD1m.

As of June 30 this year, total balance sheet footings had increased by 24pc to BD87.5m.

Assets under management stood at BD205m compared with BD206m at the year-end.

Assets under custody with SICO's wholly owned subsidiary, SICO Funds Services Company, (SFS) totalled BD858m compared with BD864m at year-end.

Year-to-date, net interest income, net fee, commission income, brokerage and other income contributed BD583,000, BD1.1m and BD401,000 respectively to operating income.

Net investment income contributed to BD1.32m.

Total operating expenses for the first half, including staff overheads, general administration and other expenses amounted to BD2.2m, compared with BD2.1m for the corresponding period last year.

"International and regional markets started the year on a positive note, with confidence levels increasing as a result of a brighter global economic outlook," said chief executive Anthony Mallis.

"Regional markets witnessed a surge in volumes, with speculative stocks appreciating by as much as 80pc.

"Reflecting these buoyant market conditions, SICO reported operating income of BD2.6m for the first three months of 2012, with net investment income contributing BD1.5m.

"Net profit for the period was BD1.4m.

"However, after a four-month rally, investors booked profits due to rising concerns over the health of the euro zone, weaker economic data from the US and China and a deteriorating regional geo-political environment," he said.

"The three-month period from April to June witnessed a return of the unprecedented volatility in regional and international capital markets experienced during 2011, with some year-to-date gains in 2012 having been erased," he added.

The turbulent investment conditions discouraged most investors, with many staying on the sidelines, Mr Mallis said.

"The regional sukuk and bond market has been particularly active during the second quarter of 2012, which in our opinion is a positive trend as it expands further the regional capital markets' product range," he said

"Generally these negatively-biased business conditions had a constraining impact on the bank's business, particularly on the non-trading business lines," he added.

SICO continued to maintain a strong capital base, ending the first-half with increased shareholders' equity of BD55.22m and a strong consolidated capital adequacy ratio of 61.87pc.

The bank has 38.7pc of its balance sheet in cash and deposits, compared to 28.2pc at the year-end.

Available for sale securities at the end of June this year rose to BD30.67m compared with BD27.04m at the end of 2011.

Investments at fair value through profit or loss reduced to BD14.98m compared with BD16.74m at the year-end.

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Publication:Gulf Daily News (Manama, Bahrain)
Date:Aug 10, 2012
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