BNH announces a Net profit of BD3.9 million in 2016

2/22/2017 12:04:06 AM -

Manama: - Bahrain National Holding B.S.C. announced its consolidated results for the year, 2016. The Group reported a good performance, despite challenging market conditions.

Farouk Almoayyed, Chairman of the Group, stated: “On behalf of the Board of Directors, I am pleased to announce a Net profit of BD3.9 million for the year 2016 compared to BD4.2 million in 2015, a decrease of 7%. The Group posted a net profit of BD750 thousand for the fourth quarter of 2016 compared to BD655 thousand for the same period in 2015. During the year, the company faced a difficult environment due to the economic impact of various government measures to tackle the rising fiscal deficit including rationalization of spending, subsidy reduction in certain items and higher fees for certain services. BNH’s results during the year demonstrated the resilience of the Group to these challenges. In the final quarter of 2016, the Central Bank of Bahrain’s (CBB) directed insurance companies to reconcile their motor subrogation claims with counterparties. This is a very positive step, as it reduces the insurance sector’s receivables and counterparty risks. As a result, we received additional information allowing us and the independent actuary, to better estimate the company’s claims reserves. In line with our conservative philosophy, we increased our claims reserves, which marginally impacted our underwriting results.  On the positive side, we witnessed a healthy growth in our motor premiums as well as positive underwriting performance in general insurance. Our investment portfolio continued its consistent performance in 2016 despite difficult and volatile market conditions. Total comprehensive income for the year registered a growth of  67% from BD2.2 million to BD3.7 million in 2016 with total equity increasing from BD47.7 million to BD49.1 million in 2016.”

“Gross written premiums remained steady compared to 2015, with the total premiums standing at BD28.4 million. Net underwriting profit fell by 18% , from BD2.3 million to BD1.9 million, primarily as a result of additional claims provisioning. Group investment income reduced from BD2 million in 2015 to BD1.6 million due to volatile regional markets. However, this fall was more than compensated by strong performance from our associates share of profits which increased by 36% to BD2.1 million”

The Chairman also added that the Group has strong liquidity with cash and balances with banks of BD14 million in 2016 compared to BD10.9 million in 2015. The earnings per share decreased slightly by 4% from 37.8 fils in 2015 to 36.2 fils in 2016.

In line with the Group’s consistent dividend policy and taking into account the performance in 2016, the Board of Directors is recommending a dividend of 20% to the shareholders, subject to approval of concerned authorities and the shareholders at the Annual General Meeting.

Mr. Sameer Al Wazzan, Chief Executive of BNH said: “The Group was able to maintain its gross premiums at BD28.4 million, with net premiums going up 5% from BD14.8 million in 2015 to BD15.6 million this year, primarily due to higher motor premiums.  Net commission income grew to BD605 Thousand compared to BD7 thousand loss, due to strong performance of general insurance portfolio.”

“Net underwriting profit fell by 18%, from BD2.3 million to BD1.9 million primarily due to an increase in claims in motor, life and medical segments and conservative claims reserving for motor.  Net investment income fell by 22%, from BD2 million to BD1.6 million due to lower profits on sale of investment securities. Share of profits from associates jumped by 36%, to BD2.1 million in 2016, compared to BD1.5 million in the previous year. This resulted in a net profit for the Group of BD3.9 million compared to BD4.2 million in 2015.” he added.

“I am happy to report that the past year was another good one for BNH, especially when taking into consideration the economic and geopolitical situation that the world, and our region in particular, found itself in at its outset.” said Mr. Al Wazzan.