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Barita posts $80m profit before taxes

Published:Wednesday | February 1, 2012 | 3:01 PM

Securities dealer Barita Investments Limited posted profit before taxes of $80 million for the quarter ending December 2011, a 55 per cent increase over the $44 million recorded for the corresponding period the previous year.

Net profit for the period totalled $51 million or earnings per share of $0.11, compared to $32 million or $0.07 for the corresponding period in 2010.

With some stabilization in interest rates, its interest income revenues remained relatively flat, but net interest income increased by $39 million or 36 per cent during the review period, the company said in its financial report.

Barita said continued improvements in asset and equity trading activities have seen its revenues increase to $22 million and $25 million respectively, approximately doubling the prior year’s performance.

It said the continuing European financial crisis has led to the euro decreasing in value and was a significant contributor to the $7million translation loss accounted for in the quarter under review.

Operational costs during the quarter reflected increases in the company’s advertising and public relations activities “as we tried to improve our visibility,” said Barita chairman, Rita Humphries-Lewin.

Increases in staff costs reflect initiatives in human resource development and capacity building, said the financial report. Operating expenses for the period totalled $109 million, a $24 million increase over the $85 million reported for the corresponding period in 2010.

But Humphries-Lewin said: “We continue to aggressively manage our costs as we seek to improve the efficiency of our organization.”

Barita recorded a $39 million or 36 per cent increase in net interest income, and $21 million or 95 per cent increase in non-interest income. The increase in non-interest income was driven primarily by improved performance in equity and bond trading activities, the report said.

Total revenues for the quarter was $197 million compared to $129 million during the corresponding period last year, thus reflecting an increase of $69 million or 53 per cent. Operating expenses totalled $109 million compared to $85 million the prior year.

The company’s asset base showed a $1.2 billion or 9 per cent increase over prior year from $12.9 billion to $14 billion, while its liabilities increased by $810 million or 7 per cent. As a result, Barita recorded an increase in shareholder’s equity by approximately $400 million to $1.8 billion.

Increased capital requirements by the dealer’s main regulators continue to impact its capital ratios, but Barita said it remained very adequately capitalised.