Consolidated Statement of Financial Position At 31 December 2019 2018 2019 BD 000 Note BD 000 ASSETS Cash and balances with banks and Central Bank of Bahrain Due from banks Financing contracts Investments Investment in sukuk Investment in associates Receivables and other assets Premises and equipments TOTAL ASSETS 7 8 9 10 11 12 14 99,535 115,216 913,907 6,156 270,277 8,461 247,328 9,553 1,670,433 49,651 74,694 886,779 6,304 222,471 12,885 246,878 5,140 1,504,802 LIABILITIES, EQUITY OF INVESTMENT ACCOUNT HOLDERS, AND OWNERS' EQUITY LIABILITIES 15 Customers' current accounts Due to banks Due to non-banks Other liabilities Subordinated wakala payable 128,258 165,471 402,375 15,399 96,011 807,514 669,260 127,748 225,467 372,473 14,284 17 18 95,859 835,831 486,708 EQUITY OF INVESTMENT ACCOUNT HOLDERS 19 20 OWNERS' EQUITY Equity attributable to shareholders of the Parent Share capital Statutory reserve Fair value through equity reserve Proposed dividend Retained earnings 132,519 24,115 324 22,517 3,587 183,062 10,597 193,659 132,519 21,613 170 16,608 3,587 174,497 Non-controlling shareholders 7,766 182,263 TOTAL LIABILITIES, EQUITY OF INVESTMENT ACCOUNT HOLDERS AND OWNERS' EQUITY 1,670,433 1,504,802 OFF-BALANCE SHEET EQUITY OF INVESTMENT ACCOUNT HOLDERS CONTINGENT LIABILITIES AND COMMITMENTS 135,145 108,796 135,110 73,191 22 Hamad Abdulmohsen AlMarzouq Chairman of the Board of Directors Abdulhakeem Yaqoub Alkhayyat Managing Director and Chief Executive Officer Consolidated Statement of Financial Position At 31 December 2018 2018 BD 000 2017 BD 000 Note ASSETS Cash and balances with banks and Central Bank of Bahrain Due from banks Financing contracts Investments Investment in sukuk Investment in associates Receivables and other assets Premises and equipments TOTAL ASSETS 7 8 9 10 11 12 13 49,651 74,651 886,779 6,304 219,039 12,885 250,353 5,140 1,504,802 66,962 46, 107 737,552 7,747 157,065 12,599 272,856 9,437 1,310,325 LIABILITIES, EQUITY OF INVESTMENT ACCOUNT HOLDERS, AND OWNERS' EQUITY LIABILITIES 16 Customers' current accounts Due to banks Due to non-banks Other liabilities Subordinated wakala payable 18 19 127,748 224,405 367,176 23,946 94,250 837,525 485,014 135,098 163,760 234,933 23,101 94,250 651,142 477,676 EQUITY OF INVESTMENT ACCOUNT HOLDERS 20 21 OWNERS' EQUITY Equity attributable to shareholders of the Parent Share capital Statutory reserve Fair value through equity reserve Proposed dividend Retained earnings 132,519 19,768 132,519 21,613 170 16,608 3,587 174,497 7,766 182,263 18,095 3,321 173,703 7,804 181,507 Non-controlling shareholders TOTAL LIABILITIES, EQUITY OF INVESTMENT ACCOUNT HOLDERS AND OWNERS' EQUITY 1,504,802 1,310,325 OFF-BALANCE SHEET EQUITY OF INVESTMENT ACCOUNT HOLDERS CONTINGENT LIABILITIES AND COMMITMENTS 135,110 73,191 135,080 135,078 23 Hamad Abdulmohsen AlMarzouq Chairman of the Board of Directors Abdulhakeem Yaqoub Alkhayyat Managing Director and Chief Executive Officer Consolidated Statement of Financial Position At 31 December 2018 2018 BD 000 2017 BD 000 Note ASSETS Cash and balances with banks and Central Bank of Bahrain Due from banks Financing contracts Investments Investment in sukuk Investment in associates Receivables and other assets Premises and equipments TOTAL ASSETS 7 8 9 10 11 12 13 49,651 74,651 886,779 6,304 219,039 12,885 250,353 5,140 1,504,802 66,962 46, 107 737,552 7,747 157,065 12,599 272,856 9,437 1,310,325 LIABILITIES, EQUITY OF INVESTMENT ACCOUNT HOLDERS, AND OWNERS' EQUITY LIABILITIES 16 Customers' current accounts Due to banks Due to non-banks Other liabilities Subordinated wakala payable 18 19 127,748 224,405 367,176 23,946 94,250 837,525 485,014 135,098 163,760 234,933 23,101 94,250 651,142 477,676 EQUITY OF INVESTMENT ACCOUNT HOLDERS 20 21 OWNERS' EQUITY Equity attributable to shareholders of the Parent Share capital Statutory reserve Fair value through equity reserve Proposed dividend Retained earnings 132,519 19,768 132,519 21,613 170 16,608 3,587 174,497 7,766 182,263 18,095 3,321 173,703 7,804 181,507 Non-controlling shareholders TOTAL LIABILITIES, EQUITY OF INVESTMENT ACCOUNT HOLDERS AND OWNERS' EQUITY 1,504,802 1,310,325 OFF-BALANCE SHEET EQUITY OF INVESTMENT ACCOUNT HOLDERS CONTINGENT LIABILITIES AND COMMITMENTS 135,110 73,191 135,080 135,078 23 Hamad Abdulmohsen AlMarzouq Chairman of the Board of Directors Abdulhakeem Yaqoub Alkhayyat Managing Director and Chief Executive Officer Consolidated Statement of Income For the year ended 31 December 2019 2019 BD 000 2018 BD 000 Note 24 25 Income from financing contracts Income from investments Income from sukuk Share of income from associates OPERATING INCOME 63,429 1,720 20,200 (164) 85,185 52,321 6,432 11,349 170 70,272 (11,229) (4,012) (9,680) 7,727 (10,233) 7,666 Return on equity of investment account holders (wakala) Return on equity of investment account holders (mudaraba) before Group's share as mudarib Group's share as mudarib Return on equity of investment account holders (mudaraba) after Group's share as mudarib Profit on due to banks, due to non-banks and subordinated wakala payable NET OPERATING INCOME 29 (1,953) (23,208) 48,795 (2,567) (18,551) 45,142 Staff costs Depreciation Provisions - net Other expenses TOTAL OPERATING EXPENSES NET INCOME FOR THE YEAR 13,235 1,292 (631) 9,889 27 15,337 1,184 459 9,745 26,725 28 23,785 25,010 18,417 Attributable to: Shareholders of the Parent Non-controlling shareholders 25,019 (9) 25,010 18,453 (36) 18,417 Hamad Abdulmohsen AIMarzouq Chairman of the Board of Directors Abdulhakeem Yaqoub Alkhayyat Managing Director and Chief Executive Officer percentage of total operating income. Which items improved over the last three years? Which trends need to be reversed? b. Create an income statement with operating expenses expressed as a percentage of total operating expenses. Which items improved over the last three years? Which trends need to be reversed? 3. Analyze the performance of the bank for each year. a. Calculate the return on assets (ROA) for each year. How has the ROA trend changed over the last three years? b. Calculate the return on equity (ROE) for each year. How has the ROE trend changed over the last three years? 4. Identify the strengths and weaknesses of your bank relative to trends over time. SAMPLE BALANCE SHEET Your Bank, Your Bank, Your Bank, Year 3 Year 2 Year 1 Assets (Use of Funds) Reserves 892 648 558 369 236 Cash items in process of collection 169 Deposits at other banks 246 124 179 Securities Federal government Provincial and local 2,062 739 2,243 673 1,694 538 Consolidated Statement of Financial Position At 31 December 2019 2018 2019 BD 000 Note BD 000 ASSETS Cash and balances with banks and Central Bank of Bahrain Due from banks Financing contracts Investments Investment in sukuk Investment in associates Receivables and other assets Premises and equipments TOTAL ASSETS 7 8 9 10 11 12 14 99,535 115,216 913,907 6,156 270,277 8,461 247,328 9,553 1,670,433 49,651 74,694 886,779 6,304 222,471 12,885 246,878 5,140 1,504,802 LIABILITIES, EQUITY OF INVESTMENT ACCOUNT HOLDERS, AND OWNERS' EQUITY LIABILITIES 15 Customers' current accounts Due to banks Due to non-banks Other liabilities Subordinated wakala payable 128,258 165,471 402,375 15,399 96,011 807,514 669,260 127,748 225,467 372,473 14,284 17 18 95,859 835,831 486,708 EQUITY OF INVESTMENT ACCOUNT HOLDERS 19 20 OWNERS' EQUITY Equity attributable to shareholders of the Parent Share capital Statutory reserve Fair value through equity reserve Proposed dividend Retained earnings 132,519 24,115 324 22,517 3,587 183,062 10,597 193,659 132,519 21,613 170 16,608 3,587 174,497 Non-controlling shareholders 7,766 182,263 TOTAL LIABILITIES, EQUITY OF INVESTMENT ACCOUNT HOLDERS AND OWNERS' EQUITY 1,670,433 1,504,802 OFF-BALANCE SHEET EQUITY OF INVESTMENT ACCOUNT HOLDERS CONTINGENT LIABILITIES AND COMMITMENTS 135,145 108,796 135,110 73,191 22 Hamad Abdulmohsen AlMarzouq Chairman of the Board of Directors Abdulhakeem Yaqoub Alkhayyat Managing Director and Chief Executive Officer Consolidated Statement of Financial Position At 31 December 2018 2018 BD 000 2017 BD 000 Note ASSETS Cash and balances with banks and Central Bank of Bahrain Due from banks Financing contracts Investments Investment in sukuk Investment in associates Receivables and other assets Premises and equipments TOTAL ASSETS 7 8 9 10 11 12 13 49,651 74,651 886,779 6,304 219,039 12,885 250,353 5,140 1,504,802 66,962 46, 107 737,552 7,747 157,065 12,599 272,856 9,437 1,310,325 LIABILITIES, EQUITY OF INVESTMENT ACCOUNT HOLDERS, AND OWNERS' EQUITY LIABILITIES 16 Customers' current accounts Due to banks Due to non-banks Other liabilities Subordinated wakala payable 18 19 127,748 224,405 367,176 23,946 94,250 837,525 485,014 135,098 163,760 234,933 23,101 94,250 651,142 477,676 EQUITY OF INVESTMENT ACCOUNT HOLDERS 20 21 OWNERS' EQUITY Equity attributable to shareholders of the Parent Share capital Statutory reserve Fair value through equity reserve Proposed dividend Retained earnings 132,519 19,768 132,519 21,613 170 16,608 3,587 174,497 7,766 182,263 18,095 3,321 173,703 7,804 181,507 Non-controlling shareholders TOTAL LIABILITIES, EQUITY OF INVESTMENT ACCOUNT HOLDERS AND OWNERS' EQUITY 1,504,802 1,310,325 OFF-BALANCE SHEET EQUITY OF INVESTMENT ACCOUNT HOLDERS CONTINGENT LIABILITIES AND COMMITMENTS 135,110 73,191 135,080 135,078 23 Hamad Abdulmohsen AlMarzouq Chairman of the Board of Directors Abdulhakeem Yaqoub Alkhayyat Managing Director and Chief Executive Officer Consolidated Statement of Financial Position At 31 December 2018 2018 BD 000 2017 BD 000 Note ASSETS Cash and balances with banks and Central Bank of Bahrain Due from banks Financing contracts Investments Investment in sukuk Investment in associates Receivables and other assets Premises and equipments TOTAL ASSETS 7 8 9 10 11 12 13 49,651 74,651 886,779 6,304 219,039 12,885 250,353 5,140 1,504,802 66,962 46, 107 737,552 7,747 157,065 12,599 272,856 9,437 1,310,325 LIABILITIES, EQUITY OF INVESTMENT ACCOUNT HOLDERS, AND OWNERS' EQUITY LIABILITIES 16 Customers' current accounts Due to banks Due to non-banks Other liabilities Subordinated wakala payable 18 19 127,748 224,405 367,176 23,946 94,250 837,525 485,014 135,098 163,760 234,933 23,101 94,250 651,142 477,676 EQUITY OF INVESTMENT ACCOUNT HOLDERS 20 21 OWNERS' EQUITY Equity attributable to shareholders of the Parent Share capital Statutory reserve Fair value through equity reserve Proposed dividend Retained earnings 132,519 19,768 132,519 21,613 170 16,608 3,587 174,497 7,766 182,263 18,095 3,321 173,703 7,804 181,507 Non-controlling shareholders TOTAL LIABILITIES, EQUITY OF INVESTMENT ACCOUNT HOLDERS AND OWNERS' EQUITY 1,504,802 1,310,325 OFF-BALANCE SHEET EQUITY OF INVESTMENT ACCOUNT HOLDERS CONTINGENT LIABILITIES AND COMMITMENTS 135,110 73,191 135,080 135,078 23 Hamad Abdulmohsen AlMarzouq Chairman of the Board of Directors Abdulhakeem Yaqoub Alkhayyat Managing Director and Chief Executive Officer Consolidated Statement of Income For the year ended 31 December 2019 2019 BD 000 2018 BD 000 Note 24 25 Income from financing contracts Income from investments Income from sukuk Share of income from associates OPERATING INCOME 63,429 1,720 20,200 (164) 85,185 52,321 6,432 11,349 170 70,272 (11,229) (4,012) (9,680) 7,727 (10,233) 7,666 Return on equity of investment account holders (wakala) Return on equity of investment account holders (mudaraba) before Group's share as mudarib Group's share as mudarib Return on equity of investment account holders (mudaraba) after Group's share as mudarib Profit on due to banks, due to non-banks and subordinated wakala payable NET OPERATING INCOME 29 (1,953) (23,208) 48,795 (2,567) (18,551) 45,142 Staff costs Depreciation Provisions - net Other expenses TOTAL OPERATING EXPENSES NET INCOME FOR THE YEAR 13,235 1,292 (631) 9,889 27 15,337 1,184 459 9,745 26,725 28 23,785 25,010 18,417 Attributable to: Shareholders of the Parent Non-controlling shareholders 25,019 (9) 25,010 18,453 (36) 18,417 Hamad Abdulmohsen AIMarzouq Chairman of the Board of Directors Abdulhakeem Yaqoub Alkhayyat Managing Director and Chief Executive Officer percentage of total operating income. Which items improved over the last three years? Which trends need to be reversed? b. Create an income statement with operating expenses expressed as a percentage of total operating expenses. Which items improved over the last three years? Which trends need to be reversed? 3. Analyze the performance of the bank for each year. a. Calculate the return on assets (ROA) for each year. How has the ROA trend changed over the last three years? b. Calculate the return on equity (ROE) for each year. How has the ROE trend changed over the last three years? 4. Identify the strengths and weaknesses of your bank relative to trends over time. SAMPLE BALANCE SHEET Your Bank, Your Bank, Your Bank, Year 3 Year 2 Year 1 Assets (Use of Funds) Reserves 892 648 558 369 236 Cash items in process of collection 169 Deposits at other banks 246 124 179 Securities Federal government Provincial and local 2,062 739 2,243 673 1,694 538