Venture Capital Bank is back in the black with a net profit of $ 13 million in the first-half, building on its already successful first-quarter net profit of $ 8m.

The Bahrain-based regional Islamic investment bank had reported a loss of $ 7.5m for the corresponding period last year.

Net profit and total income for the second quarter amounted to $ 5m and $ 9.1m respectively, compared with a loss of $ 4.5m and $ 3.2m respectively for the corresponding quarter last year.

Total income increased five-fold to $ 20.7m for the half year compared to $ 4.8m in the corresponding period last year, with income from investment banking activities rising significantly to $ 18.2m compared with $ 1.5m last time.

Concurrently, total expenses decreased to $ 5.8m from $ 7.5m for the corresponding period in the previous year as a result of rigorous cost-reduction efforts instituted in response to the current market crisis.

The results are also net of additional provisions of $ 1.3m which the board had booked in the period as a measure of prudence in the light of current market conditions.

The bank's balance sheet has also seen good improvement with total assets increasing to $ 209.6m at the half-year from $ 198.5m at year-end while continuing to remain unleveraged.

Shareholders' equity grew 6.9 per cent to $ 192m from $ 179.7m at year-end.

Total income from investment banking activities increased dramatically by 11 times to $ 18.1m from $ 1.52m for the corresponding period in 2011, said chairman Dr Ghassan Ahmed Al Sulaiman.

"These encouraging results have been achieved despite the challenges facing the banking sector in the region and the world and the investment sector in particular," he said.

"The bank's results confirm the feasibility of our plans, followed in accordance with the new strategy of the bank that includes restructuring investments and focusing on venture capital and private equity sector in the Middle East and North Africa region.

"Additionally, it supports and confirms our commitment to provide shareholders and investors with acceptable rates of return.

"Strongly capitalised at $ 250m, with liquid assets of $ 10.3m and currently unleveraged, Venture Capital Bank is a financially strong and solid institution," Dr Al Sulaiman added.

At half-year, capital adequacy ratio was 43pc, considerably higher than the minimum requirement of the Central Bank of Bahrain. Assets under management had risen by 12pc to $ 863m compared with $ 749m as of June 30 2011, he said.

"The results reflect the bank's high performance and effectiveness of its diversification of investments," said chief executive and board member Abdullatif Mohamed Janahi.

"The first six months of this year witnessed the conclusion of a number of deals that helped strengthen our current investments.

"Venture Capital Bank took an indirect investment in 65pc of the equity of Gšknur Foods Import Export Trading and Distribution Company in Turkey, in a deal valued at $ 93.7m," he said.

"We are confident that the bank will continue its excellent performance into the future through flexible strategies with the ability to adapt and capitalise on changes and opportunities in the market," he added.