Annual Report 2012 - Al Baraka Investment and Development

president & chief executiVe’s report
(continued)
Al BARAKA BAnK syRiA s.a.
Founded 2009
A shortage of foreign currency on account of the combined
impact of the EU embargo and sanctions on the Central Bank
of Syria has resulted in the depreciation of the Syrian Pound
by over 20% over the year despite Central Bank intervention.
Meanwhile, the continuing crisis has enlarged the fiscal and
current account deficits.
Al Baraka Syria began commercial operations during the third
quarter of 2010. It managed to achieve profitability as early as
2011, its first full year of operating, and in 2012, despite the
enormous logistical and economic problems arising from the
civil turbulence continuing in Syria, it once again managed to
grow and to make another positive contribution to the Group.
Although its deposits – including foreign currency deposits -
surged (customer deposits including equity of IAH rose by 96%
in Syrian Pound terms but, in view of the sharp fall in the value
of the local currency, by 37% in US dollar terms) the bank made
a deliberate decision to restrict its financings during this difficult
time. While its total assets grew by some 84% in Syrian Pound
terms and 28% in US dollar terms, most of this growth was kept
in liquid assets.
48 Annual Report 2012
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The bank focused primarily on expanding its off-balance sheet
business such as letter of credit and guarantee issuance, which in
themselves generated significant income. Total operating income
amounted to $25 million compared with $11 million the year
before, whilst operating expenses totalled $7 million, producing a
net operating income $18 million and, after significantly increased
provisions and a higher allowance for taxation, a net profit of
$9 million, compared with $4 million in 2011.
The year saw the establishment of a Call Centre and the launching
of SMS banking services. In response to local market conditions,
the bank will continue to develop new products and services
to add to its existing range of corporate and retail facilities,
treasury products and investment and deposit accounts, trade
finance and electronic money transfer services and a spread of
e-services including Internet banking and electronic debit cards.
It recently added monthly income deposits to its range. In 2013,
subject to favourable market conditions, it plans to open 3 more
branches and install additional ATMs. It will also be engaged in
making preparations for establishing a new headquarters building
in Yafour, outside Damascus. Its rolling 5-year branch network
plan continues to anticipate having 30 branches established by
the end of 2017.
(All figures in US Dollars unless otherwise stated)