Ithmaar Bank reports loss after provisions, but core business continues to grow

Bahrain-based Ithmaar Bank reported a net loss of BHD 29.9 million in 2013, compared to a net loss of BHD 10.1 million in 2012. One of the major factors impacting the performance of the Group for this year is the reduction in benchmark profit rates in Pakistan, coupled with increased minimum profit rate on certain liability products resulting in significant margin compression in FBL. The bank has therefore taken some key decisions including cost rationalization measures across the Group. Moreover, the remaining conventional operations of its subsidiary Faysal Bank Limited Pakistan’s (FBL) will be conversed to Islamic banking, subject to approval from FBL shareholders and the regulators.