BEST ISLAMIC FINANCIAL INSTITUTIONS IN BAHRAIN (GLOBAL FINANCE 2008) : ABC Islamic Bank

Arab Banking Corporation (B.S.C.) ("ABC") was incorporated as a Bahrain joint stock company on 17th January 1980 by Amiri degree in Kingdom of Bahrain and was issued an Offshore Banking Unit license by the Bahrain Monetary Agency on April 7, 1980 beginning its operations that month with an authorized capital of US$1,000 million.

By April 1981, an amount of US$750 million was fully paid by ABC's original three shareholders: the Ministry of Finance of Kuwait (later transferred to the Kuwait Investment Authority), the Libyan Secretariat of Treasury (whose shares were later transferred to the Central Bank of Libya) and the Abu Dhabi Investment Authority.

Each of the three shareholding groups held one-third of ABC's share capital until 1990. At the end of 1989, ABC's authorized capital was increased to US$1,500 million. In 1990, ABC listed its shares on the Bahrain and Paris stock exchanges and increased its paid-up capital to US$1,000 million by a public offering in Bahrain and an international private placement.

ABC's strategy of diversified growth led to the development of its widespread network (the "ABC Group") of branches, representative offices, subsidiaries and affiliates in 21 countries around the world, including most principal international financial centers.

ABC Islamic Bank today announced the bank’s net profit for the year to September 2008 of US$23 million. This was an increase of 60% over the net profit for the comparable period last year and a record nine months profit in the history of the bank.

Total income reached US$27.30 million (2007: US$17.93 million), while fee income of US$4.88 million increased by 85% over the same period last year. Operating expenses of US$4.29 million increased only by 15% over the same period last year, attributable to an increase in the cost of living. The Bank’s cost-to-income ratio was 15.7%, lower than 20.8% for the same period last year.

ABC Islamic Bank’s total assets amounted to US$1,440 million (2007 year end: US$1,365 million) with an increase in Available-for-sale investments which stood at US$375 million (2007: US$329 million) mainly in Sukuks. Murabaha receivables and Ijara assets increased to US$1,048 million (2007: US$ 995 million) as the lending portfolio continued to grow to meet customer demand.

Commenting on the results, Mr. Naveed Khan, Managing Director, said, “Despite the turmoil in global markets we have managed to achieve record results for ABC Islamic Bank. These results are a testament to solid relationships developed with core customers and hard work put in by staff, coupled with the strong support we get from the parent group. We are hopeful of consolidating and building on these results for the full year 2008.”