Manama 17th June 2007: Al Baraka Turk Participation Bank, one of Albaraka Banking Group’s (B.S.C) Units (ABG), announced that Fitch Ratings has upgraded the Bank’s ratings to foreign and local currency Issuer Default 'BB-' (BB minus) from 'B', National Long-term 'A+' from 'BBB+’ and Support '3' from '5'. The Outlooks on foreign and local currency IDRs and the National rating remain Stable. The bank's other ratings are affirmed at Short-term foreign and local currency 'B' and Individual 'D'.
Fitch Ratings said that the upgrade of Al Baraka Turk Participation’s ratings reflects Fitch's revised view over the probability support from Albaraka Turk's majority shareholder, Albaraka Banking Group ("ABG") in case of need. The Individual rating reflects improved profitability and asset quality during the previous year. Al Baraka Banking Group owns a 68% stake in the capital of the Bank
Mr. Adnan Ahmed Yousif, Chairman of Al Baraka Turk Participation Bank and Chief Executive Officer of Al Baraka Banking Group expressed his happiness to the Fitch Ratings’ announcement, saying that the Bank achieved excellent results in 2006, especially if we consider the economic conditions prevailing in Turkey and the intense competition in the market.
The Chairman of the Bank said that the Bank in 2006 opened a number of branches and launched many new Shari'a-compliant and highly competitive investment and financing products and services. This had a very positive impact on the gross income from jointly financing and investments which increased by 21% to reach US$149.8 million. Due to increased volume of business, net operating income increased by 89.3% in comparison to 2005 to reach US$61.33 million. Net income witnessed an excellent increase of 52.5% compared to 2005, to reach US$50.72 million. The increase in net income resulted in improvements in the return on average equity and on average total assets, which went up from 27.93% and 2.69% respectively in 2005 to 34.07% and 3.24% in 2006.
In 2006, the assets of the Bank increased by 26.44% to reach US$1.75 billion compared to US$1.46 billion as at the end of 2005. This increase in assets was the result of an increase in Murabaha finance operations which increased by 27% to reach US$1.29 billion and financial leasing transactions (Ijarah muntahiyya bittamleek), which increased by 8% to reach US$103 million. These increases were financed by a big increase in customer deposits as a result of the opening of new branches and increasing the range of investment products. Customer current account and other accounts increased by 10% and unrestricted investment accounts by 19%, which reflected in an increase of 24.82% in the volume of deposits to reach US$1.51 billion in 2006, which, in turn, financed 86.5% of the Bank's total assets. As
for shareholders’ equity, it grew by 32.54%, to reach US$169.73 million as at the end of 2006.
The Bank is considered the best among the participation banks in Turkey, as it held the first position in terms of total assets and deposits per branch and employee and it managed to maintain this position in 2006 in spite of increasing the number of its branches by twenty new branches to reach a total of 63 branches. Each of these branches is equipped with an automatic teller machine (ATM).
Mr. Adnan Ahmed Yousif emphasized that the excellent results achieved by the Bank in 2006 were the result of the hard work of the Bank's executive management and the strong support that the parent company (ABG) extended to its subsidiary Units. He added that Turkey is considered as one of the key markets of the Group because of the variety and abundance of economic activities and huge promising opportunities. In view of this, the Board of Directors of the Bank provided all the necessary support required for expanding the Bank's branch network, increasing the number of installed ATMs, and developing new products during 2007. The Bank's plan for this year also includes increasing the acquisition of customer deposits both in local and foreign currencies, with special focus on small to medium size customers, focusing on marketing its credit cards and alternative delivery channels. The Bank also will continue its preparations towards complying with the requirements of Basle II, enhancing its anti-money laundering procedures as well as continuing with measures in preparation for launching its IPO in an opportune time.
Al Baraka Turk Participation Bank is one of the Banking Units of Al Baraka Banking Group’s (ABG), a Bahraini Joint Stock Company listed on the Bahrain and Dubai stock exchanges, which is a leading international Islamic bank with a Standard & Poors long-term rating of BBB- and a short-term rating of A-3. . ABG offers retail, corporate and investment banking and treasury services strictly in accordance with the principles of the Shari'a. The authorized capital of ABG is US$1.5 billion, while the total equity amounts to about US$1.2 billion. The Group has a wide geographical presence in the form of subsidiary banking Units in ten countries, which in turn provide their services through more than 216 branches. These banking Units are Banque Al Baraka D'Algerie, Algeria; Al Amin Bank, Bahrain; Al Baraka Islamic Bank, Bahrain; the Egyptian Saudi Finance Bank, Egypt; Jordan Islamic Bank, Jordan; Al Baraka Bank Lebanon, Lebanon; Al Baraka Bank Ltd, South Africa; Al Baraka Bank Sudan, Sudan; Bank Et-tamweel Al Saudi Al Tunisi, Tunisia; Al Baraka Turk Participation Bank, Turkey and Al Baraka Bank, Pakistan. For more information please visit www.abg.bh