Annual Report 2012 - Al Baraka Investment and Development

president & chief executiVe’s report
(continued)
Al BARAKA BAnK tUnisiA
Founded 1983
The Tunisian economy is reckoned to have grown by some 3.0%
in 2012 compared with the -1.8% negative growth the previous
year. In the aftermath of the people’s revolution of January 2011
and the replacement of the previous President with a democratic
government, the return to relative normality in the economy has
been a cause for much optimism. However the process has been
a gradual, although steady one and has also been affected by
the country’s proximity to Libya and the events there. Standard
& Poor’s rating agency rated Tunisian foreign long-term debt
at BB in May 2012.
The government is pursuing a policy of fiscal expansion, financing
infrastructure development as a driver for employment creation.
The Central Bank is likely to adopt a benevolent monetary
policy to expand liquidity, although this is likely to produce an
increase in inflation. The rate of inflation in 2012 was estimated
at 5.0%, up from 3.5% in 2011. Tunisia has a structural trade
deficit, which widened in 2012 as exports were impacted by
lower demand from the EU, Tunisia’s most important market.
However it usually maintains a positive services balance on
account of tourism and other service revenues, supplemented
by transfers from expatriate Tunisians and inward investment,
reducing the size of the overall current account.
The Central Bank announced that it intends to conduct
a comprehensive review of all Tunisian state banks, with the
intention of restructuring them.
Impacted by the significant rise of the US dollar against the
Tunisian Dinar, in 2012 Al Baraka Tunisia’s total assets rose by
only 4% to $569 million, as a 9% decline in its Murabaha sales
46 Annual Report 2012
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receivable was compensated by 50% growth in its Mudaraba
portfolio and the increase in Ijarah Muntahia Battamleek by
$5 million. Customer deposits increased by 6%, mainly due to
a 21% expansion in the equity of IAH. Total income from joint
financings and investments was 2% up at $20 million although,
after accounting to the IAH for their share, the bank’s share
including its share as Mudarib was 7% higher than in 2011 at
$14 million. With the inclusion of its income from its own
investments, banking fees and commissions and other income, its
total operating income was also 7% higher at just over $20 million.
As total operating expense at $11 million was 9% higher than in
2011, however, the net operating income was only a little higher at
$10 million. After substantially increased provisions and taxation
charge, the bank reported a net profit of $5 million, 38% below the
$8 million recorded the previous year.
Following the full implementation of its new core banking
systems, Al Baraka Tunisia can now offer full e-banking services
to its customers. During the year it launched its Gold Visa Card.
It will be launching its new mobile banking service in 2013,
when it also plans to launch a Platinum Visa Card for its premier
customers. The bank is seeking a resident banking licence and
intends to convert itself from an offshore to an onshore bank
once the authorities have approved this measure, which it expects
will allow it to expand its customer base and overall business
activities. In anticipation of the introduction by the authorities of
a new Islamic banking law, the bank also has under development
a number of financing and investment products to be launched
in 2013. A business centre at the main branch, focusing on the
needs of businessmen and enterprises, which had been planned
for 2012, is also now expected to be unveiled in 2013. Under
its revised 5-year rolling expansion plan, it will work towards
opening 2 more branches by 2017, bringing its network to 10,
with the ATM network being expanded accordingly.
(All figures in US Dollars unless otherwise stated)