For Immediate Release

Bank of Palestine Group

February 15, 2022

FULL YEAR 2021 PRELIMINARY RESULTS AND KEY METRICS

ROA

ROE

CAR

OPERATING

LOANS TO

C/I%

0.87%

11.18%

15.12%

DEPOSITS%

58.83%

65.09%

NET REVENUE (GROSS PROFIT) OF $262.2 MILLION

NET PROFIT OF $56.5 MILLION

EARNINGS PER SHARE OF $0.23

Key Messages & Highlights

  • Revenues increased by 18.0% from USD 222.2 million for the YE 2020 to USD 262.2 million for the YE 2021.
  • Profit before tax increased by 110.3% from USD 40.2 million for the YE 2020 to USD 84.4 million for the YE 2021.
  • There was a significant gain in foreign exchange due to the increase in the volume of transactions driven by competitive prices and digital channels trading.
  • Furthermore, improved gains were realized from investment portfolio due to better dividends payout and the recovery of stock exchanges in the region.
  • Better control of operating expenses and enhanced collection process contributed to higher profits.
  • Enhanced collection and follow-up processes in addition to better NPL management also resulted in improved cost of risk and lower NPL ratio.
  • Cost to income ratio decreased from 80.9% for the YE 2020 to 67.8% for the YE 2021.
  • Enhanced performance of BOP subsidiaries; Palpay and Al-Wasata with a solid growth for Arab Islamic Bank.
  • Net profit increased by 152.1% from USD 22.4 million for the YE 2020 compared to USD 56.5 million for the YE 2021.
  • Return on Equity increased from 5.24% at the end of 2020 to 11.18% at the end of 2021.
  • Earnings per share increased from 0.10 at the end of 2020 to 0.23 at the end of 2021.
  • Capital adequacy ratio reached its highest levels in BOP Group history from 14.24% at the end of 2020 to 15.12% at the end of 2021.
  • Total assets increased by 12.0% from USD 5.8 billion at the end of 2020 to USD 6.5 billion at the end of 2021.

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  • Net Loans increased by 5.7% from USD 3.3 billion at the end of 2020 to USD 3.5 billion at the end of 2021.
  • Customer deposits increased by 9.7 % from USD 4.8 billion at the end of 2020 to USD 5.3 billion at the end of 2021.
  • Total shareholders' equity increased by 14.5% from USD 433.5 million at the end of 2020 to USD 496.2 million at the end of 2021.

Other Messages during 2021

  • The Bank increased its paid up capital to USD 217.4 million through a private placement with FISEA - the AFD Group Investment Vehicle advised by Proparco. FISEA is now a strategic partnership and shareholder of Bank of Palestine with an ownership of 3.34%. This partnership includes a technical assistance program to boost BOP's initiatives to invest in sustainability.
  • Bank of Palestine has won the World's Best Trade Finance Providers 2021 Country Award by Global Finance.
  • Bank of Palestine signed a trade facilitation program with EBRD with a USD 5 million limit to support local exporters and importers while expanding its correspondent banking network.
  • BOP Group closed the year 2021 with a thrust in sustainability that would be reflected on all its operations, engagements and relations.

Ramallah, Palestine February 15, 2022- Bank of Palestine Group (BoP) announced its financial results reporting net profit for the year ended 2021 of USD 56.5 million and revenues of USD 262.2 million compared to net profit of USD 22.4 million and gross profit of USD 222.2 million for the year ended 2020. Total assets increased to USD 6.5 billion compared with USD 5.8 billion at the end of 2020. The Bank's total shareholders' equity also increased to USD 496.2 million compared with USD 433.5 million at the end of 2020.

+152.1 YOY%

Table: Net Profit Bridge

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Chairman and CEO Commentary

Commenting on year 2021's performance, Mr. Hashim Shawa, Bank of Palestine Group Chairman said: "The Group has proved not only resilience and adaptability but also the ability of transforming challenges into opportunities. During the unprecedented times of economic downturn as a result of the global pandemic, we were able to accelerate our plans in digitalization and sustainability to enhance customer satisfaction and grow our stakeholders' value while keeping them safe. 2021 marks as an important milestone in the Group's journey in which we reflected our value-rootedvision through our thrust in sustainability, digital transformation and financial inclusion. The Bank continues to uphold its commitment to growing the economy despite the macroeconomic challenges in Palestine".

Mr. Mahmoud Shawa, the Bank's CEO commented: "Throughout the operating quarters of 2021, the Bank demonstrated growth and strength in its financial performance and capital structure. The Group achieved a net profit of USD 56.5 m which is the highest in its history with solid capital adequacy ratio of 15.12%. On the projects' level, the Bank finalized its segmentation project for better customer service and being more efficient on operations and enhanced its digital banking services to respond to its customers' needs. As part of its financial inclusion and sustainability strategies, the Bank continues to support SMEs, women in business, energy efficiency and renewable energy projects in addition to developing new product programs for Retail & SMEs. As for our employees, the Bank has started a new project in performance evaluation in line with the new organizational restructuring and career development plans. In 2022, we will see the fruits of the implementation of the new digital consumer experience in line with our transformation journey and we will continue to support our society and maintain a clean environment."

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Annex: Bank of Palestine Group Financials

Bank of Palestine

Consolidated Statement of Financial Position

As of December 31, 2021

12/31/2021

12/31/2020

USD

USD

Assets

Cash and balances with Palestine Monetary Authority

1,779,579,889

1,323,410,056

Balances and investments at banks and financial institutions

782,817,995

747,858,727

Financial assets at fair value through profit or loss

10,253,849

18,735,305

Direct credit facilities and Islamic financing

3,453,139,478

3,266,748,588

Financial assets at fair value through other comprehensive income

42,028,862

28,559,024

Financial assets at amortized cost

229,645,417

205,499,230

Investment in associates and a joint venture

9,652,487

5,946,380

Investment properties

25,962,178

25,884,919

Property, plant and equipment and right of use assets

115,897,814

121,430,377

Projects in progress

1,366,792

2,680,297

Intangible assets

14,613,893

15,428,395

Other assets

43,298,245

47,628,690

Total Assets

6,508,256,899

5,809,809,988

Liabilities and Equity

Liabilities

Palestine Monetary Authority's deposits

242,439,107

168,347,302

Banks and financial institutions' deposits

120,061,868

82,088,201

Customers' deposits

5,013,697,756

4,580,935,374

Cash margins

291,588,276

253,088,880

Subordinated loan

72,500,000

75,000,000

Loans and borrowings

48,442,500

27,636,180

Istidama loans from Palestine Monetary Authority

22,307,552

9,134,926

Lease liabilities

31,900,160

33,453,914

Sundry provisions

50,983,323

48,851,375

Taxes provisions

21,086,957

4,610,652

Other liabilities

97,067,400

93,142,513

Total Liabilities

6,012,074,899

5,376,289,317

Equity

Paid-in share capital

217,433,527

208,080,000

Additional paid-in capital

29,575,688

24,848,415

Statutory reserve

61,896,623

56,970,341

Voluntarily reserve

246,361

246,361

General banking risks reserve

10,311,877

10,311,877

Pro-cyclicality reserve

40,000,000

40,000,000

Fair value reserve

(1,888,233)

(4,999,792)

Retained earnings

77,729,642

43,763,159

Total equity holders of the Bank

435,305,485

379,220,361

Non-controlling interests

60,876,515

54,300,310

Total Equity

496,182,000

433,520,671

Total Liabilities and Equity

6,508,256,899

5,809,809,988

Bank of Palestine

Consolidated Income Statement

For the year ended December 31, 2021

2021

2020

USD

USD

Interest Income

166,252,374

161,289,379

Interest Expenses

(38,906,250)

(42,650,597)

Net Interest Income

127,346,124

118,638,782

Net financing and investment income

50,166,699

35,662,682

Net commissions income

46,085,241

43,156,485

Net Interest and Commissions Income

223,598,064

197,457,949

Foreign Currency Gain

22,113,144

16,745,839

Net gains from financial assets portfolio

7,951,831

611,729

Change in fair value of investment properties

(285,740)

48,050

Bank's share of results of associates and a joint venture

441,850

442,861

Other revenues

8,396,247

6,941,015

Gross Profit

262,215,396

222,247,443

Expenses

Personnel Expenses

(82,647,551)

(73,595,572)

Other operating expenses

(51,622,367)

(48,620,126)

Depreciation and amortization

(17,927,102)

(18,858,916)

Provision for expected credit losses, net

(23,496,115)

(39,457,786)

Credit facilities not previously provided for and written off

(2,052,766)

(1,532,623)

Palestine Monetary Authority's fines

(20,000)

(22,052)

Total Expenses

(177,765,901)

(182,087,075)

Profit before taxes

84,449,495

40,160,368

Tax expense

(27,945,169)

(17,748,220)

Profit after taxes

56,504,326

22,412,148

Comprehensive Income Statement

For the year ended December 31, 2021

2021

2020

USD

USD

Profit for the period

56,504,326

22,412,148

Comprehensive Income Items:

Change in the fair value of financial assets

3,678,291

(1,322,007)

Total Other Comprehensive Income items

3,678,291

(1,322,007)

Total comprehensive income for the period

60,182,617

21,090,141

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Bank of Palestine plc published this content on 17 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 February 2022 10:45:04 UTC.