BLOM reports stable profits

FFA sets target price per listed share at $10

BLOM Bank reported a one percent growth in net profits in 2012, to $335 million. FFA Private Bank, in a flash note on the bank’s results, said these figures were below its expectations of a ten percent growth in net profits.

BLOM Bank remains conservative in terms of provisioning when facing rising uncertainties in its foreign operations, FFA said. The bank allocated $103 million of provisions in 2012, compared to $40 million the year before. The significantly higher provisions were offset by a nine percent increase in operating income. The growth in operating income was mainly driven by trading and investment income (up by 67 percent), as income from core activities, including interest income and fees and commissions, was roughly flat.

BLOM’s consolidated assets grew by eight percent to $25 billion. Deposits were up by seven percent to $21 billion despite deposit outflows in the bank's Syrian operations. Assets of its Syrian subsidiary (Bank of Syria and Overseas) stood at $790 million at end-September, down by some 20 percent from a low base at end-2011. Net profits were down by 85 percent to $1 million.

The consolidated portfolio of loans to customers grew by 7.8 percent to $6 billion. The loans-to-deposits ratio stood at 27.7 percent. BLOM’s capital adequacy ratio of 13 percent highlights a comfortable capitalization level.

Diluted earnings stood at $1.53 per BLOM listed share, compared to $1.48 in 2011. FFA rated BLOM shares at ‘Overweight’ with a target price of $10 per share, lower than its earlier valuation of $11, but higher than the currently traded share price ($7.9 at last closing).