Al Baraka Bank Egypt records 48 points on First Bank financial soundness index
Al Baraka Bank Egypt has been seen scoring 48.21 points on First Bank’s financial soundness index, compared to the sector average of 50 points.
The financial soundness index set by First Bank, measures the strength and soundness of the banks' financial positions and their ability to preserve the funds of depositors and shareholders
The financial soundness index is based on six measures: the capital adequacy ratio, the financial leverage ratio, assets to deposits ratio, shareholders equity to deposits ratio, loans to deposits ratio and non-performing loan ratio.
Al Baraka Bank’s capital adequacy ratio reached 18.61% at the first half of 2022, while the average rate of banks operating Egypt was at 20.9% during the same period, exceeding the regulatory limits set by the Central Bank of Egypt which are consistent with Basel Accord of 12.5.
The bank has been ranked the 11th on First Bank list of the top banks in terms of capital adequacy ratio on H1-22. The analysis included 20 banks operating in the Egyptian banking sector for which financial statements were made available.
Moreover, the bank’s financial leverage ratio recorded 7.51% at the end of June 2022 below the average rate of banks operating Egypt of 6.9 %. The financial leverage ratio reflected the relation between tier I used in capital adequacy ratio and the bank’s non-risk-weighted assets exceeding the regulatory limits set by the Central Bank of Egypt which is consistent with Basel Accord of 3 %.
However, the bank’s ratio of non-performing loans to total loans portfolio recorded 3.8 % in H1-22 higher than an average of 3.2 % of the total banking sector.
In addition the bank’s assets to deposits ratio declined below the banking sector average recording 114.3% at the end of June 2022, compared to an average of 136.20% of the total banking sector during the same period
However, the bank’s shareholders equity to assets ratio increased slightly to 9.15% at the end of June 2022, compared to an average 9% of the total banking sector during the same period.
Furthermore, loans to deposits ratio has seen a remarkable increase record 39.86% at the end of June 2022, compared to an average 48.5% of the total banking sector during the same period.
