Financial review

Net interest income

BD million

2019 107.3
2018 109.9
2017 90.9
2016 85.8
2015 72.7

Total equity

BD million

2019 547
2018 500
2017 501
2016 474
2015 361

Customer deposits

BD million

2019 2,170
2018 2,375
2017 2,624
2016 2,494
2015 2,643

Loans and advances

BD million

2019 1,671
2018 1,773
2017 1,741
2016 1,767
2015 1,765

Total assets

BD million

2019 3,865
2018 3,582
2017 3,763
2016 3,703
2015 3,646

The key financial indicators of the Bank remain healthy with a return on average assets of 1.8 percent and a return on average equity of 13.7 percent.


Despite tough conditions in the banking sector and economy as a whole, BBK managed to maintain its high performance in 2019, achieving a record profit of BD 75.4 million attributable to shareholders for the year ended 31 December 2019, representing an increase of BD 8.3 million or 12.4 percent growth over 2018 results.

The key financial indicators of the Bank remain strong with a return on average assets of 1.9 percent and a return on average equity of 14.9 percent. The diluted earnings per share increased from 52 fils to 59 fils. The Bank maintained a more comfortable liquidity position this year, increasing the liquid assets share of total assets from 27.6 percent to 34.4 percent.

This section provides a review of our Group’s financial performance, focusing on the consolidated operating results and BBK’s consolidated statement of financial position, including its overseas branches, subsidiaries, joint ventures, associated companies, and indirect investment in associates through subsidiaries.

The consolidated financial statements have been prepared and are presented in accordance with the International Financial Reporting Standards, Bahrain Commercial Companies Law, Central Bank of Bahrain (CBB) and Financial Institutions law, and CBB rulebook requirements.

Operating results

Net profit for 2019 increased by 12.4 percent from last year, amounting to BD 75.4 million, despite the total operating income for the year decreasing slightly by BD 5.5 million or 3.5 percent (standing at BD 151.5 million), mainly due to lower interest and non-interest income.

Continuing BBK’s prudent approach to risk management and provisioning, the Bank conservatively provided for adequate provisioning levels in 2019, applying the IFRS 9 accounting standard.

Net interest income

The net interest income decreased by 2.4 percent to BD 107.3 million (2018: 109.9 million). This was mainly due to the increase in interest expenses on the new Euro medium-term notes.

Other income

Other income consists of non-interest income, derived from business activities such as dealing in foreign currencies, investing in funds other than fixed-income funds, corporate banking and retail banking services, investment trading, and income from associated companies and joint ventures.

Total other income reported for year 2019 stood at BD 51.0 million compared to BD 51.2 million in 2018. Net fees and commissions, the main component of total other income, stood at BD 26.6 million (2018: BD 28.2 million), and income from associated companies at BD 6.8 million (2018: BD 4.1 million). Other income relating to foreign exchange and investment income decreased slightly from BD 18.9 million to BD 17.6 million.

Summary statement of profit or loss

Operating expenses

Due to the implementation of VAT, new strategic and business initiatives, and improving delivery channels, the Bank’s operating expenses increased by 9.5 percent, from BD 57.7 million to BD 63.2 million. Staff costs increased by 4.7 percent, while non-staff related costs increased by 17.8 percent to reach BD 25.1 million (2018: BD 21.3 million). Nevertheless, the Bank’s prudent cost control policy and strong revenue-generating capability enabled it to maintain a healthy cost to income ratio of 40.0 percent (2018: 35.8 percent).

Net provisions

The Bank has followed and applied the International Financial Reporting Standard 9 since 2016. IFRS 9 replaces the incurred loss model in IAS 39 with an expected credit loss model. The net provision charges during 2019 amounted to BD 18.9 million, compared to BD 35.3 million in 2018. The decrease was due to active management of distressed exposures and higher recovery efforts.

Comprehensive income

The Bank’s total comprehensive income attributed to the owners stood at BD 109.3 million for the year ended 31 December 2019, compared to BD 47.4 million at the end of 2018. The robust performance of various financial markets and increase in valuations of investment securities globally benefited the Bank’s other comprehensive income, leading to positive unrealised valuations on investment securities.

Financial position

The Group maintained its strong financial position and comfortable liquidity.

As at 2019 year-end, the total assets of the Group stood at BD 3,865.0 million (2018: BD 3,581.7 million).

The Bank has been consistent in achieving a good balance between deposits and loans and advances with a comfortable ratio of net loans and advances to customer deposits of 77.0 percent as of end of 2019 (2018: 74.6 percent).


Total assets stood at BD 3,865.0 million as at 31 December 2019, an increase of 7.9 percent on the previous year’s BD 3,581.7 million. Loans and advances decreased slightly (5.7 percent), while the excess was used as cash and balances with the central bank, treasury bills, and placements with banks and other financial institutions.


The Bank’s funding structure remains strong, with minimal reliance on the interbank market. Customer deposits remained the main source of funding, representing 65.4 percent of total liabilities. While the bank continued to grow its retail customer base, increasing its retail liabilities to BD 901.4 million (2018: BD 823.8 million), total customer deposits decreased to BD 2,169.5 million during 2019 (2018: BD 2,374.5 million) due to overall reduction of liquidity from the GCC markets. Borrowing under repurchase agreements and term borrowing remain integral parts of the bank’s medium and stable funding sources, with the former standing at BD 313.4 million at year-end (2018: BD 199.0 million), and the latter at BD 333.0 million (2018: BD 144.5 million).

Consolidated statement of financial position

Capital adequacy

The Bank has implemented the Basel III framework for the calculation of capital adequacy since January 2015, in accordance with Central Bank of Bahrain guidelines.

Total equity attributable to the owners of the Bank stood at BD 543.9 million at the end of 2019 (2018: BD 497.7 million). The Bank improved its capital adequacy ratio to 21.7 percent from the previous year’s 19.6 percent, well above CBB’s minimum regulatory requirement of 14.0 percent for Domestic Systemically Important Banks (D-SIBs). The Group is keen to maintain strong capitalisation to support future strategic plans, through adoption of dynamic profit retention policy.

Our noticeable growth over the years is a result of our sustained culture of superior performance, our widespread participation in both local and international markets, and excellent customer service, which enables us to sustain the momentum we have built over the years and to enhance value for shareholders.