Ithmaar Bank Chairman Prince Amr Al Faisal (2nd left), with Ithmaar Bank Chief Executive Officer and member of the Board Mohammed Bucheerei (right), and Board member Khalid Janahi during the annual general meeting Sunday. Mahmood Rafique Saudi Gazette MANAMA – The implementation of the much trumpeted Basel III required by the BIS to be implemented by bank regulators by year-end, will have disastrous consequences on the developing world banking system, Ithmaar Bank Chairman Prince Amr Al Faisal warned Sunday. “The Basel Committee on Banking Supervision which revised the standards governing the capital adequacy of internationally active banks known as Basel III will put the Third World's entire banking system under a tight jacket and virtually leading to a collapse of the system,” he told reporters after the bank's annual general assembly in Manama. “Those regulators who have been sleeping on the wheels are responsible for the financial turmoil and had never been punished and to me, the implementation of Basel III is locking the stable door after the horse is stolen,” referring to the financial crisis, he noted. “This myopic view to implement the Basel III in this part of the world, to punish the entire world for the mistakes of few developed nations, will virtually choke the entire banking system and I am sure that Basel III will be abandoned,” he asserted. Ithmaar, which merged its one of its affiliates First Leasing Bank, was a strategic move to strengthen bank's business lines. Like other banking institutions, Ithmaar wants to be one of the major banking players across the region. “We are already making profit and treading on the path of growth and the business model is in line with the bank's commitment to becoming the region's premier Islamic retail and commercial bank,” Prince Amr added. Shareholders of Ithmaar Bank, a Bahrain-based Islamic retail bank, reiterated their support for the bank's plans to increase its focus on core banking activities while working towards restructuring its investment portfolio. “Ithmaar Bank's core banking business on a standalone basis has done consistently well,” Prince Amr added. “We are posting a 26 percent year-on-year (YoY) growth in financing assets and a 31 percent YoY growth in customer funds (URIA and current accounts). Our post-April 2010 reorganization and retail focus has resulted in an 80 percent surge in new customer relationships. In fact, we grew our customer base by over 18,000 new relationships in 2012 alone, which is about 20 percent of our present total built over a 30-year history,” he said. “Although we have, clearly, got our fundamentals right and are moving in the right direction, we are posting a consolidated net loss attributable to shareholders amounting to BD11.5 million for 2012,” Prince Amr said. “This is, however, less than half the BD23.7 million losses reported in 2011, and a huge improvement over the preceding two years. It is also encouraging the turnaround in profit before impairment and taxation of BD12.8 million for 2012, compared to a loss of BD14.3million in 2011 as well as the key fact that total income has grown by 7.9 percent to BD183.4million in 2012 from BD170 million in 2011,” he said. “We are investing in people and technology, and our results have been recognized through local and international awards,” Prince Amr further said. “Our market share, as benchmarked against the statistics of the Central Bank of Bahrain, show gains on all key retail banking product offerings - current accounts, home financing, vehicle financing and personal financing,” he said. “Our other lines of business are also progressing well,” said Prince Amr said. “Corporate banking is breaking new ground in Saudi Arabia. The weighted average tenor of mudaraba deposits has almost doubled since Ithmaar's transformation while at the same time we were able to, since then, significantly reduce the financing costs, indicating a growing investor confidence. Looking inwards, we have introduced several measures such as cost rationalization, strengthening our internal controls and enhanced our reporting, financial and risk management as well as audit frameworks,” he said. Ithmaar Bank Chief Executive Officer and member of the Board Mohammed Bucheerei said the achievements stood testimony to the bank's successful transformation and stressed that the management team is committed to realizing the Board-approved vision of becoming the region's premier Islamic retail bank.
