Khaleeji Commercial Bank : Financial Results For The Six Months Ended 30 June 2017

Transcription

1. Al Salam Bank-Bahrain B .S.C. INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 30 June 2017 (Reviewed)
3. Al Salam Bank-Bahrain B .S.C. INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION 30 June 2017 (reviewed) (Reviewed) 30 June 2017 BD '000 (Audited) 31 December 2016 BD '000 97,036 364,167 146,046 11,853 221,726 278,603 194,079 15,780 21,377 120,703 51,863 20,256 11,489 46,238 25,971 - 131,990 358,269 182,452 28,934 213,687 252,807 188,485 12,304 37,016 122,073 51,863 17,781 10,561 27,260 25,971 19,840 1,627,187 1,681,293 120,097 637,138 319,730 1,451 98,045 52,275 - 132,032 723,439 279,609 217 91,837 49,043 11,421 1,228,736 1,287,598 76,267 68,796 Share capital Treasury stock Reserves and retained earnings Proposed appropriations 214,093 (1,733) 109,074 - 214,093 (1,646) 100,213 10,705 Total equity attributable to shareholders of the Bank Non-controlling interest 321,434 750 323,365 1,534 TOTAL OWNERS' EQUITY 322,184 324,899 1,627,187 1,681,293 Note ASSETS Cash and balances with banks and Central Bank Sovereign Sukuk Murabaha and Wakala receivables from banks Corporate Sukuk Murabaha financing Mudaraba financing Ijarah Muntahia Bittamleek Musharaka Assets under conversion Non-trading investments Investments in real estate Development properties Investment in associates Other assets Goodwill Assets classified as held-for-sale 3 4 5 TOTAL ASSETS LIABILITIES, EQUITY OF INVESTMENT ACCOUNTHOLDERS AND OWNERS' EQUITY LIABILITIES Murabaha and Wakala payables to banks Murabaha and Wakala payables to non-banks Current accounts Liabilities under conversion Murabaha term financing Other liabilities Liabilities relating to assets classified as held-for-sale 3 TOTAL LIABILITIES EQUITY OF INVESTMENT ACCOUNTHOLDERS OWNERS' EQUITY TOTAL LIABILITIES, EQUITY OF INVESTMENT ACCOUNTHOLDERS AND OWNERS' EQUITY ___________________________ ________________________ Sh. Hessa Bint Khalifa Al Khalifa Chairperson of the Board Yousif A. Taqi Director & Chief Executive Officer The attached notes 1 to 13 form part of these interim condensed consolidated financial statements. 2
4. Al Salam Bank-Bahrain B .S.C. INTERIM CONSOLIDATED INCOME STATEMENT For the six month period ended 30 June 2017 (reviewed) Note Three months ended 30 June 2017 BD '000 Three months ended 30 June 2016 BD '000 Six months ended 30 June 2017 BD '000 Six months ended 30 June 2016 BD '000 10,822 4,164 (33) 818 (563) 147 337 4,309 9,538 3,714 942 1,299 131 30 245 2,026 21,624 8,353 423 1,566 (275) 407 330 7,985 18,650 8,103 2,054 1,631 1,227 382 694 3,236 20,001 17,925 40,413 35,977 OPERATING INCOME Income from financing contracts Income from Sukuk (Loss) / gain on sale of investments and Sukuk Income from investments Fair value changes on investments Dividend income Foreign exchange gain Fees, commission and other income - net 6 7 8 Profit on Murabaha and Wakala payables to banks Profit on Wakala payables to non-banks Profit on Murabaha term financing Return on equity of investment accountholders before Group's share as a Mudarib Group's share as a Mudarib Total operating income (472) (778) (981) (1,112) (3,801) (637) (4,501) (410) (8,006) (1,122) (9,230) (820) (49) 22 (27) (52) 23 (29) (91) 41 (50) (107) 48 (59) 15,064 12,207 30,254 24,756 Staff cost Premises and equipment cost Depreciation Other operating expenses 2,708 346 298 2,447 2,892 587 988 2,508 5,321 727 833 4,777 5,523 1,232 1,980 4,654 Total operating expenses 5,799 6,975 11,658 13,389 9,265 5,232 18,596 11,367 (5,174) - (1,353) (3,714) - (11,111) 910 NET PROFIT FOR THE PERIOD 4,091 3,879 8,395 8,380 ATTRIBUTABLE TO: - Shareholders of the Bank - Non-controlling interest 4,127 (36) 4,060 (181) 8,477 (82) 8,710 (330) 4,091 3,879 8,395 8,380 2,125,092 2,140,931 2,125,092 2,140,931 2 2 4 4 OPERATING EXPENSES PROFIT BEFORE PROVISIONS AND RESULTS OF ASSOCIATES Provision for financing and investments - net Share of profit from associates Weighted average number of shares (in '000) Basic and diluted earnings per share (fils) __________________________ ___________________________ Sh. Hessa Bint Khalifa Al Khalifa Chairperson of the Board Yousif A. Taqi Director & Chief Executive Officer The attached notes 1 to 13 form part of these interim condensed consolidated financial statements. 3 727
5. Al Salam Bank-Bahrain B .S.C. INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS For the six month period ended 30 June 2017 (reviewed) Six months ended 30 June 2017 BD '000 Six months ended 30 June 2016 BD '000 OPERATING ACTIVITIES Net profit for the period Adjustments: Depreciation Amortisation of premium on Sukuk - net Fair value changes on investments Gain on sale of investments and Sukuk Provision for financing and investments - net Share of profit from associates 8,395 8,380 833 602 275 (423) 11,111 (910) 1,980 849 (1,227) 3,714 (727) Operating income before changes in operating assets and liabilities 19,883 12,969 Changes in operating assets and liabilities: Mandatory reserve with Central Bank Murabaha and Wakala receivables from banks with original maturities of 90 days or more Murabaha financing Mudaraba financing Ijarah Muntahia Bittamleek Musharaka Assets under conversion Other assets Murabaha and Wakala payables to banks Wakala from non-banks Current accounts Liabilities under conversion Other liabilities (1,798) 1,241 (23,508) (16,310) (26,852) (5,227) (3,476) 14,898 (19,837) (11,935) (86,301) 40,121 1,234 3,232 (5,868) (15,736) 4,481 (186) (2,905) 5,452 5,674 5,138 (77,458) 51,151 (2,134) (1,248) (115,876) (19,429) (6,472) 17,053 555 929 (2,475) (336) 6,990 42,302 4,255 7,997 (6,415) 115 (362) 7,074 (1,332) - 16,244 53,634 17,398 7,471 (10,626) (87) (11,190) 37,931 7,614 (10,705) - 2,966 34,840 NET CHANGE IN CASH AND CASH EQUIVALENTS (96,666) 69,045 Cash and cash equivalents at 1 January 284,928 223,677 CASH AND CASH EQUIVALENTS AT 30 JUNE 188,262 292,722 Net cash used in operating activities INVESTING ACTIVITIES Sovereign Sukuk Corporate Sukuk Net cash flow arising on acquisition of a subsidiary Non-trading investments Investment in associates Investments in real estate Development properties Purchase of premises and equipment Sale of a subsidiary Net cash from investing activities FINANCING ACTIVITIES Murabaha term financing Equity of investment accountholders Dividends paid Purchase of treasury stock Murabaha term financing paid Net cash from financing activities The attached notes 1 to 13 form part of these interim condensed consolidated financial statements. 4
6. Al Salam Bank-Bahrain B .S.C. INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS (continued) For the six month period ended 30 June 2017 (reviewed) Cash and cash equivalents comprise of: Cash and other balances with Central Bank Balances with other banks Murabaha and Wakala receivables from banks with original maturities of less than 90 days Six months ended 30 June 2017 BD '000 Six months ended 30 June 2016 BD '000 20,326 45,398 141,173 21,527 122,538 130,022 188,262 292,722 The attached notes 1 to 13 form part of these interim condensed consolidated financial statements. 5
7. Al Salam Bank-Bahrain B .S.C. INTERIM CONSOLIDATED STATEMENT OF CHANGES IN OWNERS' EQUITY For the six month period ended 30 June 2017 (reviewed) Amounts in BD '000s Attributable to shareholders of the Bank Reserves Foreign exchange translation reserve Share premium reserve Total reserves Proposed appropriations Share capital Treasury stock Statutory reserve Retained earnings Changes in fair value Real estate fair value reserve Balance as of 1 January 2017 Net profit for the period Net changes in fair value Foreign currency re-translation Dividend paid Sale of a subsidiary Purchase of treasury stock 214,093 - (1,646) (87) 15,338 - 50,695 8,477 79 - 445 947 - 24,234 (727) - (2,708) 85 - 12,209 - 100,213 8,477 947 85 79 (727) - Balance at 30 June 2017 214,093 (1,733) 15,338 59,251 1,392 23,507 (2,623) 12,209 Balance as of 1 January 2016 Net profit for the period 214,093 - - 13,716 - 46,803 (148) 24,253 (2,693) 12,209 - - - 8,710 - (120) - - - - - Net changes in fair value Foreign currency re-translation Dividend paid Non-controlling interest arising on acquisition of a subsidiary (note 3) Balance at 30 June 2016 214,093 - - - - - - - - - 13,716 55,513 24,253 (2,810) 12,209 (268) The attached notes 1 to 13 form part of these interim condensed consolidated financial statements. 6 (117) - - Total Noncontrolling interest Total owners' equity 10,705 (10,705) - 323,365 8,477 947 85 (10,626) (727) (87) 1,534 (82) (702) - 324,899 8,395 947 85 (10,626) (1,429) (87) 109,074 - 321,434 750 322,184 94,140 8,710 10,705 318,938 1,064 320,002 (120) (117) 102,613 - 8,710 (120) (330) - 8,380 (120) (10,705) (117) (10,705) (53) - (170) (10,705) - - 582 582 1,263 317,969 - 316,706
8. Al Salam Bank-Bahrain B .S.C. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 30 June 2017 1 INCORPORATION AND PRINCIPAL ACTIVITIES Al Salam Bank-Bahrain B.S.C. ("the Bank") was incorporated in the Kingdom of Bahrain under the Bahrain Commercial Companies Law No. 21/2001 and is registered with Ministry of Industry, Commerce and Tourism ("MOICT") under Commercial Registration Number 59308 on 19 January 2006. The Bank is regulated and supervised by the Central Bank of Bahrain ("the CBB") and has an Islamic retail banking license and is operating under Islamic principles, and in accordance with all the relevant regulatory guidelines for Islamic banks issued by the CBB. The Bank's registered office is P.O. Box 18282, Bahrain World Trade Center East Tower, King Faisal Highway, Manama 316, Kingdom of Bahrain. On 30 March 2014, the Bank acquired 100% stake in BMI Bank B.S.C.(c) ("BMI"), a closed shareholding company in the Kingdom of Bahrain, through exchange of shares. During January 2015, the Shari'a Supervisory Board approved BMI Bank to be an Islamic bank effective 1 January 2015. BMI Bank's operations are in compliance with Shari'a principles effective 1 January 2015. On 29 November 2016, the shareholders of BMI resolved to approve the transfer of business of BMI to the Bank. The transfer of all business notice period ended on 11 April 2017 and CBB approved the transfer of business of BMI to the Bank on 19 April 2017. The Bank has initiated the process to takeover all the rights and assume all the obligations of BMI at their carrying values. During 2016, the Bank acquired 70% stake in Al Salam Bank Seychelles Limited ("ASBS"), (previously “BMIO”) an offshore bank in Seychelles. BMIO used to operate under an offshore banking license issued by the Central Bank of Seychelles. From 20 May 2016, ASBS was granted a Banking Business License which permits onshore as well as offshore banking activities. The Bank and its subsidiaries operate through 10 branches in the Kingdom of Bahrain and Seychelles and offer a full range of Shari'a-compliant banking services and products. The activities of the Bank includes managing profit sharing investment accounts, offering Islamic financing contracts, dealing in Shari'a-compliant financial instruments as principal / agent, managing Shari'a-compliant financial instruments and other activities permitted for under the CBB's Regulated Islamic Banking Services as defined in the licensing framework. The Bank's ordinary shares are listed in the Bahrain Bourse and Dubai Financial Market. The Bank together with its subsidiaries is referred to as "the Group". These interim condensed consolidated financial statements have been authorised for issue in accordance with a resolution of the Board of Directors dated 7 August 2017. 2 BASIS OF PREPARATION AND ACCOUNTING POLICIES These interim condensed consolidated financial statements have been prepared in accordance with the guidance given by International Accounting Standard 34 - "Interim Financial Reporting". These interim condensed consolidated financial statements incorporate all assets, liabilities and off-balance sheet financial instruments held by the Group. The accounting policies used in the preparation of the interim condensed consolidated financial statements are consistent with those used in the preparation of the annual consolidated financial statements for the year ended 31 December 2016, which were prepared in accordance with the Financial Accounting Standards (FAS) issued by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) and in conformity with the Bahrain Commercial Companies Law and the CBB and Financial Institutions Law. In accordance with AAOIFI, for matters for which no AAOIFI standards exist, including "Interim Financial Reporting", the Group uses the relevant IFRS. These interim condensed consolidated financial statements do not contain all information and disclosures required for full financial statements prepared in accordance with AAOIFI. In addition, results for the six months ended 30 June 2017 are not necessarily indicative of the results that may be expected for the financial year ending 31 December 2017. _____________________________________________________________________________________________ __ 7
9. Al Salam Bank-Bahrain B .S.C. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 30 June 2017 2 BASIS OF PREPARATION AND ACCOUNTING POLICIES (continued) 2.1 New standards, interpretations and amendments These interim condensed consolidated financial statements have been prepared using accounting policies, which are consistent with those used in the preparation of the annual consolidated financial statements for the year ended 31 December 2016. There have been no new standards, interpretations and amendments during the period that might have any material impact on the interim condensed consolidated financial statements of the Group. 3 ASSETS AND LIABILITIES UNDER CONVERSION These represent interest bearing non-Shari'a compliant assets and liabilities of BMI and ASBS. These assets and liabilities have been reported as separate line items on the face of the interim consolidated statement of financial position. The details of the assets and liabilities under conversion are as follows: Assets Loans and advances Non-trading investments - debt Non-trading investment - fair value through equity * Liabilities Customers' deposits Other liabilities (Reviewed) 30 June 2017 BD '000 (Audited) 31 December 2016 BD '000 20,244 1,117 16 35,408 1,592 16 21,377 37,016 1,400 51 217 1,451 217 * The above fair value through equity investment is classified as Level 3 (2016: Level 3) in the fair value hierarchy (note 4). During the period, there were no movements in the fair value of this investment. 4 NON-TRADING INVESTMENTS Non-trading investments are classified as fair value through equity or fair value through profit or loss. Fair value hierarchy The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities; Level 2: other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly; or Level 3: techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data. The following table shows an analysis of the financial instruments carried at fair value in the interim consolidated statement of financial position: --------------------(Reviewed)---------------------30 June 2017 Level 1 Level 2 Level 3 Total BD '000 BD '000 BD '000 BD '000 Financial assets at fair value through profit or loss Financial assets at fair value through equity 7,088 4,546 5,404 - 101,689 1,976 114,181 6,522 11,634 5,404 103,665 120,703 _______________________________________________________________________________________________ 8
10. Al Salam Bank-Bahrain B .S.C. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 30 June 2017 4 NON-TRADING INVESTMENTS (continued) --------------------(Audited)-------------------- 31 December 2016 Financial assets at fair value through profit or loss Financial assets at fair value through equity Level 1 BD '000 Level 2 BD '000 Level 3 BD '000 Total BD '000 7,755 3,968 5,011 - 102,637 2,702 115,403 6,670 11,723 5,011 105,339 122,073 During the period, an amount of BD nil (2016: BD 1,793 thousands) was transferred from Level 1 to Level 3 fair value measurements. The movements in fair value of non-trading investments classified in level 3 of the fair value hierarchy are as follows: At 1 January Additions during the period / year Fair value changes Transfer from level 1 to level 3 Disposals during the period / year 5 (Reviewed) 30 June 2017 BD '000 (Audited) 31 December 2016 BD '000 105,339 (1,674) - 106,392 414 (1,109) 1,793 (2,151) 103,665 105,339 (Reviewed) 30 June 2017 BD '000 (Audited) 31 December 2016 BD '000 236 1,478 236 1,449 1,714 1,685 14,351 9,737 1,985 2,091 1,245 2,687 12,428 4,863 9,922 2,514 1,874 449 2,926 3,027 46,238 27,260 OTHER ASSETS Assets under conversion (a) Non-trading investments - debt Non-trading investments - fair value through equity (b) Repossessed assets Profit receivable Premises and equipment Prepayments Rental receivable on Ijarah Muntahia Bittamleek assets Credit card receivables - net (c) Other receivables and advances (d) (a) These represent non-Shari'a compliant assets resulted from the acquisition of Bahraini Saudi Bank B.S.C. ("exBSB"). (b) The above fair value through equity investments are classified as Level 3 in the fair value hierarchy (note 4). Movements in fair value through equity investments are as follows: _______________________________________________________________________________________________ 9
11. Al Salam Bank-Bahrain B .S.C. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 30 June 2017 5 OTHER ASSETS (continued) Fair value measurement using significant unobservable inputs Level 3 (Reviewed) (Audited) 30 June 31 December 2017 2016 BD '000 BD '000 At 1 January Fair value changes Additions / transfer during the period / year Disposals during the period / year 1,449 29 - 2,036 (82) (505) 1,478 1,449 (c) It includes a specific provision against credit card receivables amounting to BD 1,838 thousands (2016: BD 1,773 thousands). (d) This includes BD 8,396 thousands (2016: 1,912 thousands) relating to receivable from sale of Sukuk, investments and advances to acquire investments. 6 (LOSS) / GAIN ON SALE OF INVESTMENTS AND SUKUK (Loss) / gain on sale of: Development properties* Other investments Fair value through profit or loss investments Sukuk Held for sale investments Fair value through equity investments Three months ended 30 June 2017 BD '000 Three months ended 30 June 2016 BD '000 Six months ended 30 June 2017 BD '000 Six months ended 30 June 2016 BD '000 (45) 12 - 944 40 1 (22) (21) 98 35 (45) 12 323 - 1,924 40 61 29 - (33) 942 423 2,054 * Sales: BD 315 thousands (2016: BD 10,906 thousands) and cost: BD 217 thousands (2016: BD 8,982 thousands). 7 INCOME FROM INVESTMENTS Income on investments classified as fair value through profit or loss Rental income from investments in real estate Three months ended 30 June 2017 BD '000 Three months ended 30 June 2016 BD '000 Six months ended 30 June 2017 BD '000 Six months ended 30 June 2016 BD '000 800 18 1,029 270 1,494 72 845 786 1,299 1,566 1,631 818 _______________________________________________________________________________________________ 10
12. Al Salam Bank-Bahrain B .S.C. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 30 June 2017 8 FEES, COMMISSION AND OTHER INCOME - NET Fiduciary and other fees Other income* Financing and transaction related fees and commission Three months ended 30 June 2017 BD '000 Three months ended 30 June 2016 BD '000 BD '000 Six months ended 30 June 2016 BD '000 32 2,363 1,914 43 271 1,712 55 4,317 3,613 53 594 2,589 4,309 2,026 7,985 3,236 Six months ended 30 June 2017 * During the period ended 30 June 2017, the Group repossessed certain collaterals amounting to a total of BD 9,488 thousands (2016: BD 4,863 thousands) from its customers. These repossessed collaterals are included in other assets. Also, the Group sold a facility to a third party at a value of BD 1,594 thousands (2016: BD nil thousands). The excess amount over carrying values amounting to BD 3,933 thousands (2016: BD nil) is included in other income. 9 TOTAL COMPREHENSIVE INCOME Net profit for the period Three months ended 30 June 2017 BD '000 Three months ended 30 June 2016 BD '000 Six months ended 30 June 2017 BD '000 Six months ended 30 June 2016 BD '000 4,091 3,879 8,395 8,380 Items to be reclassified to interim consolidated income statement in subsequent periods: Unrealized gain reclassified to interim consolidated income statement on disposal of fair value through equity investments Unrealised gain / (loss) on fair value through equity investments Foreign currency re-translation - (59) - 344 71 (13) (39) 947 85 (38) (170) Other comprehensive gain / (loss) for the period 415 (111) 1,032 (290) (82) Total comprehensive income for the period 4,506 3,768 9,427 8,090 Attributable to: - Shareholders of the Bank - Non-controlling interest 4,474 32 3,905 (137) 9,509 (82) 8,473 (383) 4,506 3,768 9,427 8,090 10 RELATED PARTY TRANSACTIONS Related parties comprise major shareholders, directors of the Bank, senior management, close members of their families, entities owned or controlled by them and companies affiliated by virtue of common ownership or directors with that of the Bank. The transactions with these parties were made on commercial terms. _______________________________________________________________________________________________ 11
13. Al Salam Bank-Bahrain B .S.C. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 30 June 2017 10 RELATED PARTY TRANSACTIONS (continued) The balances with related parties at 30 June 2017 were as follows: 30 June 2017 (Reviewed) Directors Major and related Senior Associates shareholders entities management BD '000 BD '000 BD '000 BD '000 Assets: Cash and balances with banks and Central Bank Murabaha and Wakala receivables from banks Murabaha financing Mudaraba financing Ijarah Muntahia Bittamleek Musharaka Other assets Liabilities and equity of investment accountholders: Murabaha and Wakala payables to banks Murabaha and Wakala payables to non-banks Current accounts Equity of investment accountholders Other liabilities Contingent liabilities and commitments Assets: Cash and balances with banks and Central Bank Murabaha and Wakala receivables from banks Murabaha financing Mudaraba financing Ijarah Muntahia Bittamleek Musharaka Other assets Liabilities and equity of investment accountholders: Murabaha and Wakala payables to non-banks Current accounts Equity of investment accountholders Other liabilities Contingent liabilities and commitments 22 - 22 - - - - - - 22,281 2,654 27 - - 3,580 1,757 40 84 - 96 217 24 - 22,377 6,234 1,974 40 135 - 7,540 5,502 444 72 176 7,540 - 57,340 24 - 548 509 646 3 - - Total BD '000 1,757 49 135 8 - 65,147 1,026 781 83 176 31 December 2016 (Audited) Directors Major and related Senior Associates shareholders entities management BD '000 BD '000 BD '000 BD '000 Total BD '000 - 181 - - 181 25,172 1,885 947 6,786 2 1,743 1,875 45 61 115 226 24 6,786 25,287 3,628 2,101 45 1,034 4,235 343 60 743 10,505 9 - 158 1,329 825 - 1,134 132 135 5 - 16,032 1,813 960 65 743 _______________________________________________________________________________________________ 12
14. Al Salam Bank-Bahrain B .S.C. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 30 June 2017 10 RELATED PARTY TRANSACTIONS (continued) The income and expenses in respect of related parties included in the interim consolidated income statement are as follows: 30 June 2017 (Reviewed) Directors Major and related Senior Associates shareholders entities management BD '000 BD '000 BD '000 BD '000 Income: Income from financing contracts Expenses: Profit on Wakala payables to non-banks Share of profits on equity of investment account holders Other operating expenses Provision for impairment 7 16 122 5 150 49 148 4 27 228 3,750 - 2 637 - - 2 637 3,750 30 June 2016 (Reviewed) Directors Major and related Senior Associates shareholders entities management BD '000 BD '000 BD '000 BD '000 Income: Income from financing contracts Expenses: Profit on Wakala payables to non-banks Share of profits on equity of investment account holders Other operating expenses 11 Total BD '000 Total BD '000 - 11 61 2 74 11 200 1 7 219 - - 2 241 - 2 241 (Reviewed) 30 June 2017 BD '000 (Audited) 31 December 2016 BD '000 22,396 30,557 4,279 24,993 20,788 3,607 57,232 49,388 110,003 18,781 927 114,491 23,308 2,951 129,711 140,750 20,828 20,280 CONTINGENT LIABILITIES AND COMMITMENTS Contingent liabilities on behalf of customers Guarantees Letters of credit Acceptances Irrevocable unutilised commitments Unutilised financing commitments Unutilised non-funded commitments Commitments towards development cost Forward foreign exchange contracts - notional amount Letters of credit, guarantees (including standby letters of credit) commit the Group to make payments on behalf of customers contingent upon their failure to perform under the terms of the contract. _______________________________________________________________________________________________ 13
15. Al Salam Bank-Bahrain B .S.C. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 30 June 2017 11 CONTINGENT LIABILITIES AND COMMITMENTS (continued) Commitments generally have fixed expiration dates, or other termination clauses. Since commitment may expire without being utilized, the total contract amounts do not necessarily represent future cash requirements. Operating lease commitment - Group as lessee The Group has entered into various operating lease agreements for its premises. Future minimal rentals payable under the non-cancellable leases are as follows: (Reviewed) (Audited) 30 June 31 December 2017 2016 BD '000 BD '000 Within 1 year After one year but not more than five years 12 1,171 2,163 1,168 2,360 3,334 3,528 SEGMENT INFORMATION Primary segment information For management purposes, the Group is organised into four major business segments: Banking Principally managing Shari'a compliant profit sharing investment accounts, and offering Shari'a compliant financing contracts and other Shari'a-compliant products. This segment comprises corporate banking, retail banking and private banking and wealth management. Treasury Principally handling Shari'a compliant money market, trading and treasury services including shortterm commodity Murabaha. Investments Principally the Group's proprietary portfolio and serving clients with a range of investment products, funds and alternative investments. Capital Manages the undeployed capital of the Group by investing it in high quality financial instruments, incurs all expenses in managing such investments and accounts for the capital governance related expenses. These segments are the basis on which the Group reports its primary segment information. Transactions between segments are conducted at estimated market rates on an arm's length basis. Transfer charges are based on a pool rate which approximates the cost of funds. Segment information for the period ended 30 June 2017 was as follows: Banking BD '000 Operating income 30 June 2017 (Reviewed) Treasury Investments Capital BD '000 BD '000 BD '000 Total BD '000 19,290 7,051 800 3,113 30,254 5,063 5,783 (899) (1,470) 8,477 Other Information Segment assets 708,996 638,762 220,018 59,411 1,627,187 Segment liabilities and equity 905,641 347,772 36,457 337,317 1,627,187 Segment result Goodwill resulting from BMI acquisition is allocated to banking segment. _______________________________________________________________________________________________ 14
16. Al Salam Bank-Bahrain B .S.C. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 30 June 2017 12 SEGMENT INFORMATION (continued) Segment information for the period ended 30 June 2016 was as follows: 30 June 2016 (Reviewed) Operating income Segment result Banking BD '000 Treasury BD '000 Investments BD '000 Capital BD '000 Total BD '000 16,209 4,022 4,313 212 24,756 7,109 2,639 1,175 (2,543) 8,380 Segment information for the year ended 31 December 2016 (Audited) was as follows: Other information Segment assets Segment liabilities and equity 706,572 678,896 236,338 59,487 1,681,293 1,021,629 317,079 50,312 292,273 1,681,293 Goodwill resulting from BMI acquisition is allocated to banking segment. Secondary segment information The Group primarily operates in the GCC and derives substantially all its operating income and incurs all operating expenses in the GCC. 13 COMPARATIVE FIGURES Certain of the prior year figures have been reclassified to conform to the current period presentation. Such reclassifications did not affect previously reported net profit, total assets, total liabilities and total equity of the Group. _______________________________________________________________________________________________ 15