27th Apr 2016 10:22
LONDON (Alliance News) - Rasmala PLC said Wednesday its pretax profit fell in 2015, but said this was a "good result amidst difficult trading conditions" in the period in which increased risk-aversion from local and foreign investors in the Gulf Co-operation Council region meant stock markets fell and put pressure on domestic currencies.
The bank said its pretax profit for the year ended December 31 was GBP249,000, down from GBP600,000 a year earlier, as its total operating income fell to GBP10.2 million from GBP10.8 million, but costs came in higher at GBP9.7 million from GBP9.3 million.
It held assets under management of GBP723.0 million compared with GBP715.0 million the year before.
Rasmala said the the steep fall in oil price in 2015 presented a "serious challenge" to GCC economies, along with the strengthening of the US dollar which put "considerable pressure on local currency pegs".
"Other factors, such as regional conflicts and general weakness in emerging markets at a macro level, also contributed to negative investment sentiment in the GCC region. The period saw a sharp drop in market liquidity and increased risk-aversion from local and foreign investors, leading to falling stock markets, widening credit spreads and pressure on domestic currencies," Chairman Abdallah Yahya Al-Mouallimi said.
"We believe global and regional macro-economic conditions will remain challenging throughout 2016. The Gulf economies are now adapting to the steep fall in the oil price, a key factor for the region. Recent budgets from regional governments are contractionary, providing steps to counterbalance oil revenues," Yahya Al-Mouallimi said.
"There are some positive signs emerging - the price of oil appears to be stabilising after a volatile start to 2016 and the macro picture is stable. China's economy is continuing to expand, albeit at a slower rate, while higher commodity prices are supporting emerging markets. The recent weakness in GCC equity and bond markets has also prompted international investors to look to the region for opportunities," Yahya Al-Mouallimi added.
Shares in Rasmala were untraded on Wednesday, having last traded at 82.50 pence.
By Hannah Boland; [email protected]; @Hannaheboland
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