MANAMA: Bahrain Islamic Bank (BisB) is planning to increase its capital base, it was announced yesterday.
The bank said it is to boost its paid-up capital to address the growth requirements of its finance and investment portfolios.
The decision was taken during a board meeting under the chairmanship of Khalid Abdulla Al Bassam.
Mr Al Bassam said the bank has registered non-cash losses to the tune of BD5.7 million for the first half of this year.
"The losses were a result of increasing provisions on investments mainly on the portfolio for some companies listed in Bahrain.
"This measure is a precautionary step against any market changes, and in line with the bank's conservative policy in this regard.
"The board of directors agreed to increase the paid-up capital by up to 75 per cent by issuing new shares at its nominal price of 100 fils per share.
"BisB is planning to co-ordinate with the CBB and other government bodies concerned for the necessary approvals to this increase in its capital."
Mr Al Bassam said the bank's financial position is strong and its liquidity status satisfactory. He reiterated that the bank needs the new injection of cash to finance the growth requirements in its business activities.
He said BisB has played a crucial role in the development of the national economy through its various contributions in financing infrastructure projects in the kingdom.
"Among them are many finances it extended to Mumtalakat's subsidiary companies, reaffirming the bank's willingness to participate further in future government and private sector projects whenever it is found economically feasible."
Mr Al Bassam expressed his satisfaction on applying these conservative and careful policies by the bank and in keeping alert by monitoring all market movements and in exploiting the feasible opportunities available in the market as is planned in its strategy.
He also commended the bank's adherence to the governance standards and in abiding by CBB regulations and decisions as far as public disclosure and transparency standards are concerned.
Mr Al Bassam also expressed his satisfaction after Moody's formally issued its credit rating report on BisB, confirming its Baa1 status on the long-term and P2 on the short-term with a stable outlook.
Moody's positive report confirms and affirms the bank's competitive strengths and it is an international recognition of the bank's status at the same time.
Chief executive officer Mohammed Ebrahim Mohammed praised the board for supporting and approving additional provisions to strengthen the bank's financial position.
Total net provisions for the second quarter amounted to BD6.4m which resulted in a net loss of BD5.7m for the same period.
He added that what contributes to our satisfaction is the fact that the bank relies now to a large extent on Islamic finance revenues and revenues from its core activities which represent more than 80pc of its total operational revenues.
The bank revenues, also, have no component element of unearned revenue or revaluations which affirms the bank's conservative and rightful approach.
Mr Mohammed confirmed that the bank continues to accomplish its goals and future plans by concentrating on the growth of its activities and core business especially in the area of retail banking services which has grown by more than 700pc during the last three years.
Mr Mohammed said that total balance sheet footing has registered an increase of 6pc for the first six months, current accounts reached BD91m, an increase of BD12m for the same period, in addition to registering a 5pc increase in customer deposits which reflects customer confidence and loyalty to the first Islamic bank in Bahrain.
As far as the services offered by the bank are concerned, he said that in line with the approved plan the bank continues to present more of its products and services either through the bank's branches and ATMs or through its electronic portal.