BQAD.L Regulatory News (BQAD)

30 Jan 2006 17:12

Bank Audi SAL- Audi Saradar Group30 January 2006 PRESS RELEASE CONSOLIDATED ACTIVITY IN 2005 RELATIVE TO 2004 - Total assets of US$ 11.5 billion, increasing by 9,6%.- Customers' deposits of US$ 9.9 billion, increasing by 12,4%.- Net profits of US$ 106 million, increasing by 48.4%.- Shareholders' equity of US$ 949 million, increasing by 37.3%. Consolidated unaudited net profits of Bank Audi sal - Audi Saradar Group reachedLL 160.4 billion in 2005 (US$ 106.4 million), growing by 48.4% relative to 2004.The commercial and financial synergies resulting from the Merger/Acquisition ofBanque Saradar in June 2004, in addition to the organic growth in assets largelyhigher than the average of the sector lie behind of these performances. The Bank registers a growth in its assets of 9.6% relative to 2004. The latterreaches US$ 11.5 billion, and rises to US$ 15.6 billion when including fiduciarydeposits, security accounts and assets under management. The growth in assets was mainly driven by customers' deposits which grew by12.4% in 2005, i.e. the equivalent of LL 1,644 billion (US$ 1.1 billion), whileby end-November 2005, the overall growth in the sector's deposits reported LL330 billion only (US$ 219 million). In fact, the Bank's customer deposits rosefrom LL 13,263 billion in 2004 to LL 14,907 billion in 2005. This performance iseven more important when considering that it was realized at a cost of depositsbelow that of peers. As a result of these exceptional performances, Bank Audi ranks among the first25 Arab banking groups according to the most important criteria such as assets,deposits, shareholders' equity and net profits. The Bank was able to realize over the 2001-2005 period a yearly average growthin assets of 25.9%, a yearly average growth in profits of 32.6%, whichcorresponds to three times the averages of the sector. The growth in assets and net profits was not realized at the detriment of thefinancial standing of the Group. The growth in deposits was accounted for byliquid assets to the extent of 56.2%. As such, the ratio of global liquidityreaches 84.6% of customer deposits. Primary liquidity in foreign currency (cashand deposits in banks, eurobonds excluded) reaches US$ 3.9 billion, theequivalent of 53.5% of deposits in foreign currency. At the level of assetquality, the share of net doubtful loans to gross loans falls to 1.07%. Theoverall provision charge in 2005 rises to LL 32.1 billion. In addition, the Bankhas proceeded during the year to total write-offs of LL 40 billion of doubtfulloans, which bears witness of the permanent efforts to improve asset quality. The activity diversification undertaken over the past few years, in addition toregional expansion and the restructuring of European activities, ensurehenceforth a more even distribution of net financial income over interest marginand non interest income. In fact, the latter reaches 43.1% of net financialincome in 2004, a level superior to that of the industry average. At end-December 2005, the shareholders' equity of the Bank reached 1,430.7billion (US$ 949 million), one of the highest capitalization levels in thesector. The approval of the Extraordinary General Assembly, expected to be heldon 2/2/2006, of the Board of Directors' decision of 14/1/2006, for a US$ 600million capital increase would raise shareholders' equity to more than US$ 1.5billion, therefore placing the bank among the large regional banks. Based on these performances, the Bank consolidates its universal bankingprofile, covering all the spectrum of banking services. As such, its assetsrepresent 52% of Lebanon's GDP, giving to the Bank a regional dimension thatlies at the basis of its cross-border expansion strategy. Activity in Jordan haswell taken off, allowing to the Group to build assets of above US$ 300 millionin 18 months of activity, which ensures to the Bank a privileged position onthis market. Activity in Syria has taken off last September, with veryencouraging first results. In addition, the Group just won a public offer on an Egyptian Bank, the CairoFar East Bank, that ensures a good platform to launch its activities in Egyptwhich it considers very promising. The final closing of the acquisition yetdepends on the approval of the Central Bank of Egypt and the Central Bank ofLebanon. Our Bank also got in 2005 a license to operate in Iraq. We aretargeting the launch of our activities in Iraq in 2006 in the North of thecountry, the Kurdistan, which offers an interesting and securing infrastructure.In addition, a demand for an investment banking license was deposited with theCapital Markets Authorities in Saudi Arabia. The resources to be deployed inSaudi Arabia are under constitution so as to directly launch the activity oncethe approval is granted. The prospection for new regional markets with high potential is in progress,with plausible perspectives in Algeria, Sudan and Yemen. The expansion of theBank to these countries is a key prerequisite for its regional positioning, withthe aim of firmly integrating, in a five-year horizon, the restricted Group oflarge regional banks. Beirut, 30 January 2006 This information is provided by RNS The company news service from the London Stock Exchange