Al Baraka B S C : Consolidated Financial Statements 30 June 2022pdf

Al Baraka Group B.S.C. (formerly known as Al Baraka

Banking Group B.S.C.)

INTERIM CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

30 JUNE 2022 (REVIEWED)

Review report on the interim condensed consolidated financial statements to the Board of Directors of Al Baraka Group B.S.C. (formerly Al Baraka Banking Group B.S.C.)

Introduction

We have reviewed the accompanying interim consolidated statement of financial position of Al Baraka Group B.S.C. (the "Firm") (formerly Al Baraka Banking Group B.S.C.) and its subsidiary (together the "Group") as at 30 June 2022 and the related interim consolidated statement of income for the three-month and six-month periods ended 30 June 2022 and the related interim consolidated statements of changes in equity, cash flows and changes in off-balance sheet equity of investment account holders for the six-month period then ended and the explanatory notes. The directors are responsible for the preparation and presentation of these interim condensed consolidated financial statements in accordance with the basis of preparation stated in note 2 to these interim condensed consolidated financial statements. Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with the basis of preparation stated in note 2 to these interim condensed consolidated financial statements.

PricewaterhouseCoopers M.E Limited Partner's registration number: 196 Manama, Kingdom of Bahrain

11 August 2022

PricewaterhouseCoopers M.E Limited, Office no. 4701, Building no. 1459, Road no. 4626, Block no. 346, P.O. Box 60771, Manama/Sea Front, Kingdom of Bahrain, Floor 47, West Tower, Bahrain Financial Harbour, T: [phone], F: [phone], www.pwc.com/me, CR no. 47378

1

Al Baraka Group B.S.C. (formerly Al Baraka Banking Group B.S.C.)

INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2022 (Reviewed)

		Reviewed	Audited
		30 June	31 December	1 January
		2022	2021	2021
	Notes	US$ '000	US$ '000	US$ '000
			(restated -	(restated -
			note 22)	note 22)
ASSETS
Cash and balances with banks	3	5,342,823	5,681,353	5,156,577
Receivables	4	10,475,152	10,975,647	11,937,952
Mudaraba and Musharaka financing	5	2,058,519	3,493,107	2,698,516
Ijarah Muntahia Bittamleek	6	2,094,752	2,018,800	1,747,627
Investments	7	4,970,100	4,495,469	5,098,597
Property and equipment		483,566	524,111	468,919
Other assets	8	586,847	604,888	759,466
TOTAL ASSETS		26,011,759	27,793,375	27,867,654
LIABILITIES, EQUITY OF INVESTMENT ACCOUNTHOLDERS
AND EQUITY
LIABILITIES
Customer current and other accounts		6,966,784	7,579,275	7,344,227
Due to banks		808,078	1,253,451	1,600,555
Long term financing	9	329,676	286,833	319,364
Other liabilities	10	1,158,394	1,114,895	1,270,981
Total liabilities		9,262,932	10,234,454	10,535,127
EQUITY OF INVESTMENT ACCOUNTHOLDERS
Financial institutions		658,295	744,793	538,321
Non-financial institutions and individuals		14,063,465	14,813,540	14,624,227
Total equity of investment accountholders	11	14,721,760	15,558,333	15,162,548
EQUITY
Share capital	14	1,242,879	1,242,879	1,242,879
Treasury shares		(14,923)	(15,655)	(17,462)
Share premium		16,062	16,619	18,084
Reserves		194,051	196,539	183,121
Cumulative changes in fair value		55,011	55,736	32,940
Foreign currency translation reserve	14	(1,052,908)	(940,728)	(800,489)
Retained earnings		469,621	402,874	350,296
Equity attributable to parent's shareholders		909,793	958,264	1,009,369
Perpetual tier 1 capital	15	400,000	400,000	400,000
Equity attributable to parent's shareholders
and Sukuk holders		1,309,793	1,358,264	1,409,369
Non-controlling interests		717,274	642,324	760,610
TOTAL EQUITY		2,027,067	2,000,588	2,169,979
TOTAL LIABILITIES, EQUITY OF INVESTMENT
ACCOUNTHOLDERS AND EQUITY		26,011,759	27,793,375	27,867,654
________________________		______________________
Abdullah Saleh Kamel		Houssem Ben Haj Amor
Chairman		Acting Group Chief Executive Officer

The attached notes1 to 22 form part of these interim condensed consolidated financial statements. 2

Al Baraka Group B.S.C. (formerly Al Baraka Banking Group B.S.C.)

INTERIM CONSOLIDATED STATEMENT OF INCOME

For the three months and six months ended 30 June 2022 (Reviewed)

		Three months ended	Six months ended
		30 June	30 June	30 June	30 June
		2022	2021	2022	2021
	Notes	US$ '000	US$ '000	US$ '000	US$ '000
			(restated -		(restated -
			note 22)		note 22)
INCOME
Net income from jointly financed
contracts and investments		333,023	317,117	663,526	635,939
Return on equity of investment accountholders
before Group's share as a Mudarib		(271,662)	(261,727)	(545,690)	(526,125)
Group's share as a Mudarib		88,478	85,256	185,112	172,895
Return on equity of investment accountholders		(183,184)	(176,471)	(360,578)	(353,230)
Group's share of income from equity of
investment accountholders
(as a Mudarib and Rabalmal)		149,839	140,646	302,948	282,709
Mudarib share for managing off-balance sheet
equity of investment accountholders		7,554	5,898	9,661	6,043
Net income from self financed
contracts and investments		138,917	32,331	229,202	83,412
Fees and commission income		39,253	39,727	79,953	80,772
Other operating income	15	26,774	32,953	62,338	26,295
		362,337	251,555	684,102	479,231
Profit on long term financing		(8,451)	(6,084)	(14,998)	(13,805)
TOTAL OPERATING INCOME		353,886	245,471	669,104	465,426
OPERATING EXPENSES
Staff expenses		64,655	76,524	133,757	146,976
Depreciation and amortisation		14,126	17,074	28,854	36,362
Other operating expenses		47,827	43,439	96,702	86,279
TOTAL OPERATING EXPENSES		126,608	137,037	259,313	269,617
NET INCOME FOR THE PERIOD BEFORE
NET ALLOWANCE FOR EXPECTED CREDIT
LOSSES / IMPAIRMENT AND TAXATION		227,278	108,434	409,791	195,809
Net allowance for expected credit losses /
impairment	16	(121,761)	(57,257)	(206,078)	(82,666)
NET INCOME FOR THE
PERIOD BEFORE TAXATION		105,517	51,177	203,713	113,143
Taxation		(31,075)	(18,461)	(66,235)	(41,494)
NET INCOME FOR THE PERIOD		74,442	32,716	137,478	71,649
Attributable to:
Equity holders of the parent		45,106	19,978	84,638	45,563
Non-controlling interests		29,336	12,738	52,840	26,086
		74,442	32,716	137,478	71,649
Basic and diluted earnings
per share - US cents	13	2.42	0.35	5.68	2.46

_________________________	___________________________
Abdullah Saleh Kamel	Houssem Ben Haj Amor
Chairman	Acting Group Chief Executive Officer

The attached notes 1 to 22 form part of these interim condensed consolidated financial statements. 3

Al Baraka Group B.S.C. (formerly Al Baraka Banking Group B.S.C.)

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 30 June 2022 (Reviewed)

	Six months ended
	30 June	30 June
	2022	2021
	US$ '000	US$ '000
		(restated)
OPERATING ACTIVITIES
Net income for the period before taxation	203,713	113,143
Adjustments for:
Depreciation and amortisation	28,854	36,362
Depreciation on Ijarah Muntahia Bittamleek	81,936	14,600
Unrealised gain on equity and debt-type instruments at fair value
through statement of income	(99,141)	(1,188)
Gain on disposal of property and equipment	(5,852)	(7,954)
Gain on disposal of investment in real estate	(3,227)	(323)
Gain on disposal of equity-type instruments at fair value through equity	(98)	(2,563)
(Gain) / Loss on disposal of equity and debt-type instruments at fair value
through statement of income	(5)	85
Net allowance for expected credit losses / impairment	206,078	82,666
Income from associates	(4,690)	(10,298)
Operating profit before changes in operating assets and liabilities	407,568	224,530
Net changes in operating assets and liabilities:
Reserves with central banks	397,109	(67,431)
Receivables	303,750	75,751
Mudaraba and Musharaka financing	1,431,837	(931,097)
Ijarah Muntahia Bittamleek	(156,919)	(155,668)
Other assets	(20,341)	42,265
Customer current and other accounts	(612,486)	(131,097)
Due to banks	(445,373)	(113,957)
Other liabilities	73,075	(138,925)
Equity of investment accountholders	(836,955)	701,196
Taxation paid	(69,211)	(88,590)
Net cash generated from / (used in) operating activities	472,054	(583,023)
INVESTING ACTIVITIES
Net purchase of investments	(373,180)	720,957
Net purchase of property and equipment	25,255	(55,771)
Net movement in associates	2,242	1,986
Net disposal of investment in associates	(2,628)	3,352
Net cash (used in) / generated from investing activities	(348,311)	670,524
FINANCING ACTIVITIES
Net movement in treasury shares	175	(122)
Profit distributed on perpetual tier 1 capital	(15,750)	(15,750)
Profit distributed on perpetual tier 1 capital issued by subsidiaries	(2,622)	3,603
Long term financing	42,843	99,134
Net change in non-controlling interests	97,447	(24,363)
Net cash from financing activities	122,093	62,502
Foreign currency translation adjustments	(187,199)	(130,130)
NET CHANGE IN CASH AND CASH EQUIVALENTS	58,637	19,873
Cash and cash equivalents at 1 January (restated)	2,706,115	2,537,206
CASH AND CASH EQUIVALENTS AT 30 JUNE (note 20)	2,764,752	2,557,079

The attachednotes 1 to 22 form part of these interim condensed consolidated financial statements. 4