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MENA’s financial institution APICORP records $164m net comprehensive income in 2022

MENA’s financial institution APICORP records $164m net comprehensive income in 2022
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Riyadh – Mubasher: The Arab Petroleum Investments Corporation (APICORP), the only multilateral financial institution focused on energy in MENA, witnessed a 40% year-on-year (YoY) surge in net comprehensive income to $164 million in 2022.

APICORP’s balance sheet soared by 10.8% with the assets hitting $8.85 billion at the end of December 2022, according to a press release.

The robust financial results in 2022 were registered despite a volatile macroeconomic backdrop that included a decline in global equity prices. This was in addition to the rising interest rates which continued to reap the benefits of strategic decision-making and investments.

Chairman of APICORP, Aabed Al Saadoun, commented: “Guided by our strategic priorities and legacy of financing for impact, we continued to solidify our position as a trusted partner for the Arab energy sector and a leading catalyst for a balanced energy transition in the region.”

The entity’s treasury and capital markets segment witnessed the highest annual growth with $82 million increase in gross operating income.

The corporation registered gross operating income from its Corporate Banking and Treasury at $198 million in 2022 compared to a gain of $122 million in the previous year, in addition to gross operating income from Capital Markets assets at $70 million against a loss of nearly $12.50 million.  

APICORP’s achieved gross operating income results were in spite of the $54 million annual surge in the cost of funding totaling $128 million by the end of 2022, which was mainly attributed to a growth in average three-month London Interbank Offered Rate (LIBOR) which jumped from 0.16% in 2021 to 2.38% in 2022.

The balance sheet grew significantly in 2022, buoyed by a 48% jump in treasury assets to $3.27 billion by the end of 2022.

APICORP’s Investments Unit

The gross recurring operating income from the investments unit rose by 11% YoY to surpass $137 million in 2022 on the back of an uptrend in dividend and investment income, which hit $121.50 million, in addition to over $15.50 million from capital gains from selling stakes in portfolio companies such as the listed Saudi Aramco, Ashtead Technology, and Yellow Door Energy.

Furthermore, the investment portfolio assets leaped by $191 million to $1.20 billion in 2022, backed by an upward revaluation of investments.

The Investments unit was also a significant income driver last year as it accounted for 14% of APICORP’s overall assets on the balance sheet following a YoY increase of 18% from 2021.

The unit surpassed its budgeted income by 75% as a result of high dividend income from strategic investments and capital gains in the GCC equity market.

Treasury and Capital Markets

Endorsed by high interest rate environment, APICORP’s Treasury and Capital Markets unit portfolio witnessed high gross results. However, the unit still exceeded its budgeted income by 135% due to rapidly rising LIBOR rates over the course of 2022.

Corporate Banking

The corporate banking segment of the Arab corporation was a significant driver of its overall profitability in 2022 due to its size and total return, with a gross operating income increasing by 62% YoY to $198 million and being 8% above the budgeted income. The unit’s assets totalled $4.20 billion as of December 2022.

CEO of APICORP, Khalid Ali Al Ruwaigh, commented: “During the financial year 2022, we successfully navigated a volatile market with extraordinary resilience that has positively impacted our balance sheet and income. Our vision has allowed us to capitalise on market forces and post exceptional results across all APICORP business units.”

Al Ruwaigh added: “The high-interest rate environment provided a significant upward push to our performance, but at the same time presented challenges in terms of the cost of funding which we were able to navigate through optimisation of our funding solutions.”

In 2022, the MENA-focused entity deployed more than $335 million from its debut green bond proceeds to eligible projects, besides launching the Arab region’s first Sharia-compliant financing facility designed for voluntary carbon offsets. It also introduced the first A/B loan programme in the region and became the first financial institution to receive a solicited Sustainability Rating ‘A2’ from Moody’s.