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Islamic Bank Profits Higher than those of Conventional Ones

Syrian private sector banks posted positive results last year with Islamic institutions leading the way, Al-Watan reports.
Islamic Bank Profits Higher than those of Conventional Ones

The year 2018 saw an improvement in the performance of the private banking sector, as the profits of the fourteen private sector banks reached 13.8 billion Syrian pounds, an increase of 144 percent over the previous year, according to the initial financial data published on the websites of the Damascus Securities Exchange and the Syrian Commission on Financial Markets and Securities.

Notably, last year, the total profits of the three Islamic banks exceeded the total profits of the 11 conventional banks. The share of Islamic banks accounted for just over 55 percent of private sector banks profits, compared to 45 percent for conventional ones.

The Syrian private banking sector was able to increase its net profits during 2018 by about 144 percent over 2017, coinciding with stabilization of the Syrian pound’s (official) exchange rate versus the dollar during 2018 at a level of 436 pounds to the dollar. The numbers for 2017 were based on a rate of 517.43 – that is, the value of pound increased between the two years at a rate of 15.7 percent.

In this respect, the net profits of the private banking sector, both conventional and Islamic, shifted from a loss of about 31 billion pound in 2017 to a profit of 13.8 billion pound in 2018, that is an increase of more than 144 percent. Out of 14 banks, 11 achieved profits, while three banks (Bank of Jordan, Arab Bank and Syria Gulf Bank) lost about 3.5 billion pounds.

When reviewing the financial statements of the 11 conventional private banks in Syria at the end of 2018, one notes that eight achieved a net profit, while three posted losses. The net profits of the conventional banking sector were about 6.2 billion pounds. Compared with the 2017 performance, the profits of the private conventional banking sector in 2018 increased over 2017.

According to the initial data, Banque Bemo Saudi Fransi had the highest profits among conventional banks with profits of 2.8 billion pound, compared with losses of 2.07 billion pound in 2017. It was followed by Bank of Syria and Overseas with profits of 1.9 billion pound in 2018, compared with losses of 761 million pound in 2017. Then came the International Bank for Trade and Finance with a net profit of 1.4 billion pound, compared with a profit of 2.2 billion pound in 2017 (a decrease of 37 percent).

Islamic banks’ profits

The three Islamic banks operating in the Syrian market achieved net profits of 7.6 billion pound during 2018, compared with losses of four billion in 2017.

Al-Baraka Bank had the highest profits among Islamic banks, with about 4.3 billion pounds (an increase of 1,457 percent over 2017), while Syrian International Islamic Bank was in second place at the end of 2018 with profits of 2.4 billion (an increase of 236 percent over 2017). The profits of Cham Bank were about 858 million pounds (an increase of 133 percent over the profits of 2017).

This article was translated and edited by The Syrian Observer. Responsibility for the information and views set out in this article lies entirely with the author.

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