Consolidated Financial Statement 30 September 2021pdf

Al Baraka Banking Group B.S.C.

INTERIM CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

30 SEPTEMBER 2021 (REVIEWED)

Ernst & Young - Middle East	Tel: [phone]
P.O. Box 140	Fax: [phone]
East Tower - 10th floor	[e-mail]
Bahrain World Trade Center	www.ey.com/mena
Manama	C.R. no. 29977-1
Kingdom of Bahrain

REPORT ON REVIEW OF INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS TO THE SHAREHOLDERS OF AL BARAKA BANKING GROUP B.S.C.

Introduction

We have reviewed the accompanying interim condensed consolidated financial statements of Al Baraka Banking Group B.S.C. (the "Bank") and its subsidiaries (together the "Group") as of 30 September 2021, comprising of the interim consolidated statement of financial position as at 30 September 2021, the related interim consolidated statement of income for the three-month and nine-month period then ended and the related interim consolidated statements of cash flows, changes in equity and changes in off-balance sheet equity of investment accountholders for the nine-month period then ended and other explanatory information. The Board of Directors is responsible for the preparation and presentation of the interim condensed consolidated financial statements in accordance with the basis of preparation and accounting policies disclosed in note

2. Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with the basis of preparation and accounting policies disclosed in note 2.

11 November 2021

Manama, Kingdom of Bahrain

A member firm of Ernst & Young Global Limited

Al Baraka Banking Group B.S.C.

INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 30 September 2021 (Reviewed)

		Reviewed		Audited
		30 September		31 December
		2021	2020
	Notes	US$ '000		US$ '000
ASSETS
Cash and balances with banks	3	5,881,048	5,361,444
Receivables	4	11,909,106	11,945,993
Mudaraba and Musharaka financing	5	3,453,386	2,854,658
Ijarah Muntahia Bittamleek	6	1,950,785	1,747,627
Investments	7	4,288,659	5,097,189
Property and equipment		513,716	478,572
Other assets	8	648,754	764,516
TOTAL ASSETS		28,645,454	28,249,999
LIABILITIES, EQUITY OF INVESTMENT ACCOUNTHOLDERS
AND EQUITY
LIABILITIES
Customer current and other accounts		7,404,889	7,508,344
Due to banks		1,381,121	1,642,085
Long term financing	9	451,237	319,364
Other liabilities	10	1,186,840	1,327,623
Total liabilities		10,424,087	10,797,416
EQUITY OF INVESTMENT ACCOUNTHOLDERS
Financial institutions		663,545	538,177
Non-financial institutions and individuals		15,415,995	14,692,012
Total equity of investment accountholders	11	16,079,540	15,230,189
EQUITY
Share capital	14	1,242,879	1,242,879
Treasury shares		(16,258)	(17,462)
Share premium		17,526	18,084
Reserves		183,744	183,121
Cumulative changes in fair value		34,233	32,940
Foreign currency translation reserve	14	(891,452)	(800,489)
Retained earnings		440,287	364,496
Equity attributable to parent's shareholders
	1,010,959	1,023,569
Perpetual tier 1 capital	15	400,000	400,000
Equity attributable to parent's shareholders and Sukuk
holders		1,410,959	1,423,569
Non-controlling interest	14	730,868	798,825
TOTAL EQUITY		2,141,827	2,222,394
TOTAL LIABILITIES, EQUITY OF INVESTMENT
ACCOUNTHOLDERS AND EQUITY		28,645,454	28,249,999

________________________
Abdullah Saleh Kamel	Mazin Manna
Chairman	Member of the Board and Group Chief Executive Officer

Theattached notes 1 to 22 form part of these interim condensed consolidated financial statements. 2

Al Baraka Banking Group B.S.C.

INTERIM CONSOLIDATED STATEMENT OF INCOME

For the three months and nine months ended 30 September 2021 (Reviewed)

		Three months ended			Nine months ended
	30 September 30 September	30 September 30 September
		2021	2020			2021	2020
	Notes	US$ '000		US$ '000	US$ '000		US$ '000
INCOME
Net income from jointly financed
contracts and investments		336,542	316,059			973,212	984,420
Return on equity of investment accountholders
before Group's share as a Mudarib		(272,737)		(257,847)			(798,517)		(830,783)
Group's share as a Mudarib		95,867		94,057			268,874		299,550
Return on equity of investment accountholders		(176,870)	(163,790)			(529,643)	(531,233)
Group's share of income from equity of
investment accountholders
(as a Mudarib and Rabalmal)		159,672	152,269			443,569	453,187
Mudarib share for managing off-balance sheet
equity of investment accountholders		536	1,549			6,579	9,452
Net income from self financed
contracts and investments		34,953	78,698			111,855	203,684
Fees and commission income		45,847	59,159			132,979	123,853
Other operating income	16	(4,023)	783			49,675	73,083
		236,985	292,458			744,657	863,259
Profit on long term financing		(7,287)	(5,929)			(21,092)	(24,019)
TOTAL OPERATING INCOME		229,698	286,529			723,565	839,240
OPERATING EXPENSES
Staff expenses		69,667	71,756			218,249	231,423
Depreciation and amortisation		15,107	9,605			51,669	29,322
Other operating expenses		37,406	47,534			124,853	146,272
TOTAL OPERATING EXPENSES		122,180	128,895			394,771	407,017
NET INCOME FOR THE PERIOD BEFORE
NET ALLOWANCE FOR EXPECTED CREDIT
LOSSES / IMPAIRMENT AND TAXATION		107,518	157,634			328,794	432,223
Net allowance for expected credit losses /
impairment	17	(31,726)	(90,579)			(115,432)	(217,249)
NET INCOME FOR THE
PERIOD BEFORE TAXATION		75,792	67,055			213,362	214,974
Taxation		(23,220)	(25,094)			(67,008)	(82,638)
NET INCOME FOR THE PERIOD		52,572	41,961			146,354	132,336
Attributable to:
Equity holders of the parent		36,768	19,873			89,430	66,960
Non-controlling interest		15,804	22,088			56,924	65,376
		52,572	41,961			146,354	132,336
Basic and diluted earnings
per share - US cents	13	3.04	1.62			6.09	4.15
_________________________
Abdullah Saleh Kamel				Mazin Manna
Chairman	Member of the Board and Group Chief Executive Officer

Theattached notes 1 to 22 form part of these interim condensed consolidated financial statements. 3

Al Baraka Banking Group B.S.C.

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

For the nine months ended 30 September 2021 (Reviewed)

		Nine months ended
	30 September 30 September
	2021	2020
		US$ '000		US$ '000
OPERATING ACTIVITIES
Net income for the period before taxation	213,362	214,974
Adjustments for:
Depreciation and amortisation	51,669	29,322
Depreciation on Ijarah Muntahia Bittamleek	68,439	149,836
Unrealised gain on equity and debt-type instruments at fair value
through statement of income	(8,161)	(13,519)
Gain on disposal of property and equipment	(13,295)	(6,295)
Gain on disposal of investment in real estate	(4,096)	(3,171)
Gain on disposal of equity-type instruments at fair value through equity	(2,646)	(1,020)
Loss / (gain) on disposal of equity and debt-type instruments at fair value
through statement of income	(117)	(208)
Net allowance for expected credit losses / impairment	115,432	217,249
Income from associates	(5,299)	(4,865)
Modification loss net of government assistance	-	(6,370)
Operating profit before changes in operating assets and liabilities	415,288	575,933
Net changes in operating assets and liabilities:
Reserves with central banks	(372,220)	249,812
Receivables	(73,261)	(635,104)
Mudaraba and Musharaka financing	(599,385)	630,958
Ijarah Muntahia Bittamleek	(262,638)	(121,248)
Other assets	106,202	(13,581)
Customer current and other accounts	(103,465)	587,948
Due to banks	(246,911)	88,188
Other liabilities	(144,905)	120,698
Equity of investment accountholders	849,023	33,961
Taxation paid	(97,335)	(86,623)
Net cash (used in) / from operating activities	(529,607)	1,430,942
INVESTING ACTIVITIES
Net disposal / (purchase) of investments	821,575	(1,465,971)
Net purchase of property and equipment	(57,031)	(5,298)
Net movement in associates	2,217	2,359
Net disposal of investment in associates	7,220	2,605
Net cash from / (used in) investing activities	773,981	(1,466,305)
FINANCING ACTIVITIES
Dividends paid to equity holders of the parent	-	(24,858)
Net movement in treasury shares	(59)	346
Profit distributed on perpetual tier 1 capital	(15,750)	(15,750)
Profit distributed on perpetual tier 1 capital issued by subsidiaries	3,831	7,229
Long term financing	131,873	(16,238)
Net change in non-controlling interest	(30,882)	(26,377)
Net cash from / (used in) financing activities	89,013	(75,648)
Foreign currency translation adjustments	(186,035)	(228,425)
NET CHANGE IN CASH AND CASH EQUIVALENTS	147,352	(339,436)
Cash and cash equivalents at 1 January	2,778,177	2,926,184
CASH AND CASH EQUIVALENTS AT 30 SEPTEMBER (note 20)	2,925,529	2,586,748

Theattached notes 1 to 22 form part of these interim condensed consolidated financial statements. 4