Bank of Sharjah has posted a net profit for its UAE operations of AED309 million ($84 million) during financial year (FY) 2020 and a net consolidated Group profit (before exceptional non-cash adjustments) of AED176 million.

At its recent virtual Annual General Meeting the Bank presented its robust performance for FY2020 which saw the Bank maintain its underlying profitability despite the challenges arising from the global pandemic and hyperinflation in its Lebanese subsidiary. In particular, net equity improved to AED3.165 billion from AED3.018 billion for FY2019, reflecting the Bank’s continued value creation for investors.

In addition to the UAE’s strong results, at an operating level EL Bank achieved results comparable with FY2019’s performance, testament to its own resilience against an extremely challenging market backdrop. However, given the continuing hyperinflationary environment in Lebanon, the Group has applied hyperinflation accounting under international accounting best practices (IAS 29) to the subsidiary.

As a result, there was a non-cash negative adjustment to the Group’s profits of AED642 million, leading to an overall accounting loss for the year. However, this was significantly offset by an AED878 million positive impact on shareholder equity, with net equity ending the year up5% year-on-year overall.

During the year, the Group achieved an 11% increase in the customer deposit base to AED23.67 billion in the year. In addition, the Bank has maintained a high quality of assets and health metrics thanks to its rigorous approach to lending, recovery and funding. The Group’s own balance sheet also remains strong, with total assets growing 14% year-on-year to AED 36.14 billion.

The General Assembly of the shareholders approved as well the increase of the foreign shareholding ratio from 30% to 40%.

Sheikh Mohammed Bin Saud Al Qasimi, Chairman of the Bank, said: “Our performance in 2020 highlights our resilience despite unprecedented challenges. We delivered a robust performance in the UAE and our Lebanese subsidiary maintained its operational performance in challenging circumstances. More importantly, I am pleased to say that our ability to succeed in the face of adversity has shown through in the 11% increase in net equity, demonstrating the value that we are creating for our investors as we look to deliver long-term sustainable growth.”

He added: “We remain focused on delivering attractive products and services for our clients, as well as a tightly controlled approach to lending, recovery and funding. Our operational performance is testament to our success in this. We will continue to provide our clients with the tailor-made service we are known for in order to support the ongoing development and success of our business.” – TradeArabia News Service