BBK annual report eng 21.5.5

Chairman’s StatementFinancial performanceIn 2004, BBK recorded its highest ever netprofit of BD 25.7 million, an increase of 10.2%over the previous year. This includes a one-offcontribution of BD 2.92 million from the saleof part of the Bank’s strategic investments.Total assets grew by 8.2% to BD 1,421 million,confirming BBK’s status as the largest commercialbank in Bahrain for the fifth successiveyear. The Bank’s consolidated profit hasresulted in a consistent return on shareholders’equity at 17.8%. The market capitalisation ofBBK stood at the end of the year at BD 413million and its share price also increased to725 fils at the end of 2004, compared to 545fils at the end of 2003, further increasing thevalue of our shareholders’ investment.Dear ShareholdersOn behalf of the Board of Directors, I have the pleasure to present the 33rd annual reportand consolidated financial statements of Bank of Bahrain and Kuwait (BBK) for the yearended 31 December 2004. Without doubt, this was another successful year for yourBank, highlighted by record financial performance, sound strategic progress, continuedoperational success, and growing external recognition.It is also worth noting that BBK’s share priceappreciated by 33% during the year, comparedwith the rise in the Bahrain Stock MarketIndex of 30%.I am pleased to report that BBK’s sustainedfinancial performance has been recognisedby an increase in the Bank’s Foreign Currencyand Long Term Sovereignty ratings by Moody’sand Capital Intelligence. In addition, in July2004, we successfully mandated Arab BankingCorporation, Barclays Capital, Citibank, NBKand Sumitomo Mitsui to arrange a US$ 100million credit facility. The positive response by14 regional and international banks resultedin an increased medium term facility of US$125 million with tenor of five years at a verycompetitive rate, and set a new benchmarkfor the local market.Overall, this is a significant achievement, giventhe increased competitiveness of the domesticand regional markets, and the continuedvolatility of the global economy over the lasttwelve months. However, these factors wereoffset by the positive effect on the regionaleconomy by the dramatic rise in the price ofoil, which breached the US$ 50 mark for thefirst time. The increased money supply andliquidity provided a boost for investment innew infrastructure and industrial projects inBahrain, with greater participation by theprivate sector.Mr Murad Ali MuradChairmanNew developments such as the FinancialHarbour and World Trade Centre (WTC)Towers will further enhance the Kingdom’sstatus as a leading regional financial andbusiness centre. However, long-term growthcannot be sustained without major structuralchanges and reforms in a number of sectorsof the economy. These sectors include thelabour market, education and training, andgrowing the economy. The Bank welcomesthe recent initiatives to address some ofthese issues, and will actively support allmeasures that bring about their speedyand effective implementation.Annual Report 2004 04 | 05