Page 1 of 20 To: Bank AlBilad Shareholders Assalamu alaikum warahmatullahi wabarakatuh, Bank Albilad Board of Directors is pleased to present to shareholders the annual report about its main activities, achievements and the financial results for year ended December 31, 2013. Operational results: The Bank reported a net income of SAR 729 million with a decrease of 22.6% compared to the year 2012. The decrease was mainly due to gaining of SAR 373 Million as a non-operating income (Extra-ordinary) from selling its land in Aldereiah in Q1 2012 . After excluding the non-operating income, the net operating income is SAR 569 million with an increase of 28.2% compared to the year 2012. This growth is due to the increase in operating income by 10.4% at SAR 1,917 million for the year 2013, because of the increase in income from financing and investment activities to SAR 947 million with an increase of 13% compared with last year. The net fee income from banking services of SAR 666 million increased by 3.2% compared to 2012 and the net foreign exchange income increased by 5 % to reach SAR 246 million. The operating expenses increased by 1.7% at SAR 1,188 million including SAR 170 million provisions for financing and others with a decrease of 38 % compared to the year 2012 to support the Bank’s financial position against the growth in the financing portfolio. On the infrastructure side, the Bank during the year 2013 opened 14 branches to reach 102 branches, and opened 7 remittance centers ( Enjaz) to reach 151 centers at the end of 2013. On the electronic banking side, the Bank during the year 2013 added 128 Automated Teller Machines (ATMs) to reach 856 ATMs at the end of 2013 to cover the Kingdom of Saudi Arabia regions, and added 372 point of sale to reach 2,123 point of sale at the end of the year 2013. Financial position: Total assets of the Bank at the end of 2013 were SAR 36,323 million, an increase of 22% compared with last year. The customers’ deposits at the end of the year reached SAR 29,108 million, with an increase of SAR 5,366 million, representing an increase of 22.6%. The net financing also increased to SAR 23,415 million compared to SAR 18,256 million for the last year representing an increase of 28.3% Shareholders’ equity: Shareholders’ equity stood at the end of the year 2013 at SAR 5,101 million, compared to SAR 4,371 million at the end of 2012. The number of ordinary shares is 400 million shares. The Capital Adequacy Ratio at the end of 2013 was at 17.14% compared to the minimum requirement of 8%. The Bank increased the capital from SAR 3 billion to SAR 4 billion by issuing bonus shares to its shareholders in the ratio of one share for every 3 shares to become 400 million shares. The Bank achieved 2.2% as a return on average assets while the return on average shareholders’ equity is 15.4% and earnings per share is SAR 1.82 per share.
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To: Bank Albilad Shareholders · Eng.Ahmed bin Abdul Aziz Alohali New Mr. Ahmed bin Abdul Rhaman Alhsan New Mr. Khaled bin Abdullah AlSubeaei New. Page 6 of 20 The former board meetings
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Page 1 of 20
To: Bank AlBilad Shareholders
Assalamu alaikum warahmatullahi wabarakatuh,
Bank Albilad Board of Directors is pleased to present to shareholders the annual report about its
main activities, achievements and the financial results for year ended December 31, 2013.
Operational results:
The Bank reported a net income of SAR 729 million with a decrease of 22.6% compared to the
year 2012. The decrease was mainly due to gaining of SAR 373 Million as a non-operating income
(Extra-ordinary) from selling its land in Aldereiah in Q1 2012 . After excluding the non-operating
income, the net operating income is SAR 569 million with an increase of 28.2% compared to the
year 2012. This growth is due to the increase in operating income by 10.4% at SAR 1,917 million
for the year 2013, because of the increase in income from financing and investment activities to
SAR 947 million with an increase of 13% compared with last year.
The net fee income from banking services of SAR 666 million increased by 3.2% compared to
2012 and the net foreign exchange income increased by 5 % to reach SAR 246 million. The
operating expenses increased by 1.7% at SAR 1,188 million including SAR 170 million
provisions for financing and others with a decrease of 38 % compared to the year 2012 to support
the Bank’s financial position against the growth in the financing portfolio.
On the infrastructure side, the Bank during the year 2013 opened 14 branches to reach 102
branches, and opened 7 remittance centers ( Enjaz) to reach 151 centers at the end of 2013.
On the electronic banking side, the Bank during the year 2013 added 128 Automated Teller
Machines (ATMs) to reach 856 ATMs at the end of 2013 to cover the Kingdom of Saudi Arabia
regions, and added 372 point of sale to reach 2,123 point of sale at the end of the year 2013.
Financial position:
Total assets of the Bank at the end of 2013 were SAR 36,323 million, an increase of 22%
compared with last year. The customers’ deposits at the end of the year reached SAR 29,108
million, with an increase of SAR 5,366 million, representing an increase of 22.6%. The net
financing also increased to SAR 23,415 million compared to SAR 18,256 million for the last year
representing an increase of 28.3%
Shareholders’ equity:
Shareholders’ equity stood at the end of the year 2013 at SAR 5,101 million, compared to SAR
4,371 million at the end of 2012. The number of ordinary shares is 400 million shares. The Capital
Adequacy Ratio at the end of 2013 was at 17.14% compared to the minimum requirement of 8%.
The Bank increased the capital from SAR 3 billion to SAR 4 billion by issuing bonus shares to its
shareholders in the ratio of one share for every 3 shares to become 400 million shares.
The Bank achieved 2.2% as a return on average assets while the return on average shareholders’
equity is 15.4% and earnings per share is SAR 1.82 per share.
Page 2 of 20
Financial comparisons:
1. The following is an analysis of the major items of Consolidated statement of financial
Total liabilities 31,222 25,407 71,899 18,014 14,409
Total shareholders’ equity 5,101 4,371 8,193 3,103 3,002
2. The following is an analysis of the major items of Consolidated income statement:
(SAR in millions)
2013 2012 2011 2010 2009
Net income from investing and financing assets 947 840 ,18 625 513
Fee and commission income, net 666 645 153 342 280
Exchange income, net 245 234 931 121 74
Total operating income 1,917 1,737 9,8,1 1,099 909
Impairment charge on other financial assets, net (5) - - 47 61
Impairment charge for financing, net 175 275 757 242 302
Total operating expenses 1,188 1,168 9,111 1,007 1,157
Non-operating income * - 8,8 - - -
Net income / (losses) for the year * 729 942 881 92 (248)
The decrease in the net income by 22.6% of 2013 compared with 2012 was mainly due to
gaining of SAR 373 Million as a non-operating income (Extra-ordinary) from selling its land in
Aldereiah in Q1 2012 .
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Major activities:
The Bank operations are run through five major business lines as detailed below.
Retail banking
Services and products to individuals including deposits, financing, remittances and currency
exchange.
Corporate banking
Services and products to corporate and commercial customers including deposits, financing and
trade services
Treasury
Dealing with other financial institutions and providing treasury services to all segments.
Investment banking and brokerage
Includes investment management services and asset management activities related to dealing,
managing, arranging, advising and custody of securities.
Other
All other support functions.
Major activities of the Bank as at December 31, 2013 are summarized as follows:
2013 SAR’ 000
Retail Banking
Corporate Banking
Treasury Investment banking
and brokerage
Other Total
Total assets 12,229,036 14,777,653 7,774,105 288,500 1,254,014 36,323,308 Capital expenditures 64,843 108 94 4,024 453,946 523,015 Total liabilities 19,067,695 10,114,583 901,056 121,079 1,018,006 31,222,419 Net income from investing and financing assets
400,802 462,333 43,998 1,104 38,385 946,622
Fee, commission and other income, net 659,284 114,716 74,888 65,566 56,152 970,606
Total operating income 1,060,086 577,049 118,886 66,670 94,537 1,917,228 Impairment charge for financing ,net 63,457 111,830 - - - 175,287
Impairment charge for other financial assets, net
- - (5,340) - - (5,340)
Depreciation and amortization 81,592 5,983 596 353 - 88,524
Total operating expenses 814,519 308,827 30,016 34,698 - 1,188,060
Net operating income for the year 245,567 268,222 88,870 31,972 94,537 729,168
NON- Operating income - - - - - - Net income for the year 245,567 268,222 88,870 31,972 94,537 729,168
Geographical analysis of gross revenue:
Analysis of the gross revenue by region (SAR in millions)
Central Western Eastern Total
Gross revenue for 2013 1,076 548 293 1,917
Essentially, all revenues of the Bank are from activities inside the Kingdom. The Bank does not
have any branches or subsidiaries outside the Kingdom of Saudi Arabia.
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Subsidiaries:
Company
name
Date of
establishment
Main activity Capital Company
head office
Country of
establishme
nt
Ownership
AlBilad
Investment
Company
November 20,
2007
Investment services
and asset
management
activities related to
dealing, managing,
arranging, advising
and custody of
securities regulated
by the CMA
200
million
Saudi
riyal
Riyadh ,
Kingdom of
Saudi Arabia
Kingdom of
Saudi Arabia
100%
AlBilad
Real Estate
Company
September 17,
2006
Registration of the
real estate collaterals
that the Bank obtains
from its customers
500
thousand
Saudi
riyal
Riyadh ,
Kingdom of
Saudi Arabia
Kingdom of
Saudi Arabia
100%
Future plans:
The Board of Directors of the Bank approved a five years strategy for the Bank focusing on future
direction, aggressive growth by the way of enhancement of product suite, customer service,
efficient utilization of the infrastructure facilities, automation of the products and services,
channelizing resources to more profitable products and business segments.
The Bank intends to follow an ambitious plan for development of its staff for enhanced leadership
as well as core banking training and by introducing various new initiatives to attract and retain
quality talent.
Risk management:
The Bank is exposed to various risks from its activities, which is an essential component of the
nature of banking business. These risks are monitored and managed through the Bank’s Risk
Group, which represents financial risk management, credit, market and operational risk. The
details for these risks are mentioned in notes 29 to 33 of the consolidated financial statements
attached to Board of Directors report.
Accounting standards applicable:
The consolidated financial statements are prepared in accordance with the Accounting Standards
for Financial Institutions promulgated by the Saudi Arabian Monetary Agency (“SAMA”) and
with International Financial Reporting Standards (“IFRS”). The Bank also prepares its
consolidated financial statements to comply with the requirements of Banking Control Law and the
Regulations of Companies in the Kingdom of Saudi Arabia. There is no material departure from
accounting standards issued by SOCPA.
Page 5 of 20
Corporate Governance by-laws in the Kingdom of Saudi Arabia:
The Board of Directors approved a comprehensive set of Corporate Governance by-laws governed
by the rules and conditions of the Bank’s Article of Association, the Saudi Companies Law, the
CMA Regulations and executive by-laws, in addition to other regulations of relevance.
The Bank has implemented all the requirements of the corporate governance law except the
following articles:
Article Description Reasons Article 6 paragraph (D) Investors who are judicial persons and
who act on behalf of others - e.g.
investment funds- shall disclose in
their annual reports their voting
policies, actual voting, and ways of
dealing with any material conflict of
interests that may affect the practice of
the fundamental rights in relation to
their investments.
The Bank does not have the authority
to enforce judicial persons to disclose
voting policies in their annual
reports.
Article 12 paragraph (I) Judicial person who is entitled under
the company’s Articles of Association
to appoint representatives in the Board
of Directors, is not entitled to
nomination vote of other members of
the Board of Directors.
There is no representative or judicial
persons in the board of directors.
The Board of Directors:
The Board of Directors consists of 11 members, who were elected in the General Assembly
meeting held on 28/05/14341H, corresponding to April 9, 2013 for three years with effect from
07/06/1434H corresponding to April 17, 2013 until 09/07/1437 corresponding to April 16, 2016.
List of Board of Directors whose membership has expired or new
Member Membership H.E. Musaed Mohammad AlSnani Expired
Mr. Ibrahim Abdullah AlSubeaei Expired
Eng. Ail bin Othman Alzaid Expired
Mr.Adib Abdullah Alzamil Expired
Mr. Mohammed bin Abdullah ALQwaiz Expired
Eng.AbdulMohsen bin AbdulLatif Aleisa New
Mr.Fahd bin Abdullah bin Dekhayel New
Eng.Ahmed bin Abdul Aziz Alohali New
Mr. Ahmed bin Abdul Rhaman Alhsan New
Mr. Khaled bin Abdullah AlSubeaei New
Page 6 of 20
The former board meetings which ended on April 16, 2013 during the first quarter of 2013.
Member Date
14/01/2013 12/03/2013
H.E. Musaed Mohammad AlSnani
Mr. Ibrahim Abdullah AlSubeaei
Dr. Ibrahim bin Abdul Rahman Al-Barrak
Dr. Abdul Rahman bin Ibrahim Al Hamid
Eng. Ail bin Othman Alzaid X
Mr.Adib Abdullah Alzamil X
Mr Abdul Rhaman bin Mohammed Remzi Addas
Mr.Nasser bin Mohammed Al Subaie
Mr. Khalid bin Abdul Aziz AlMukairin
Mr.Khaled bin Abdulrahman Al-Rajhi
Mr. Mohammed bin Abdullah ALQwaiz
The current Board held five meetings during the year 2013 with the following attendance record of