2016

In the Name of Allah, the Most

Gracious, the Most Merciful

{And the King said, bring him to me that I may

attach him to my person.” Then, when he spoke to him, he

said, Verily, this day, you are with us high in rank and fully

trusted.)54( He said set me over the store-houses of the

land; I will indeed guard them with full knowledge. )55(.

Thus did We give full authority to Yusuf in the land, to take

possession therein, when or where he likes. We bestow

of Our Mercy on whom We will, and We make

not to be lost the reward of the good doers )56(}.

Great Truth of God

Verses 54-56 of Surat Yusuf

Shaik. Saleh Abdullah KamelChairman of Al Baraka Banking Group

Vision

We believe that the society needs a fair

financial system, one which rewards according

to the effort exerted and contributes to the

development of the community.

Mission

We aim to meet the financial needs of

all communities around the world through the

exercise of our business on the basis of morality

derived from Shari’a. In addition, we aim to apply

the best professional standards in order to share

our profits and success our partners, customers,

employees, and shareholders.

Company’s nature Public shareholding company

Date of establishment 26/2/1984

Opening date 14/3/1984

The authorized capital Million SDG 500

Paid capital and legal reserve Million SDG 176

Head Office AL Baraka Tower – Qasr Street/ Khartoum Sudan

P.O. Box Khartoum 3583

Telephones+249187112034 - +249187112000+249187112128 - +249187112050

Fax +249183778948

E-mail info@albaraka.com.sd

Website www.albaraka.com.sd

Swift RAKASDKH

8Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10Board of Directors CVs . . . . . . . . . . . . . . . . . . . . . . .

12Board of Directors’ Committees . . . . . . . . . . . .

13Executive Management . . . . . . . . . . . . . . . . . . . . . .

14Branches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15Correspondent Banks . . . . . . . . . . . . . . . . . . . . . . . .

18Al Baraka Banking Group . . . . . . . . . . . . . . . . . . . .

21Capital Contributions . . . . . . . . . . . . . . . . . . . . . . . .

22General Manager’s Speech . . . . . . . . . . . . . . . . . .

23Board of Directors Speech . . . . . . . . . . . . . . . . . . .

27Economic Situation . . . . . . . . . . . . . . . . . . . . . . . . . . .

30Bank Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31Statement of Financial Position . . . . . . . . . . . .

32Income Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . .

33Statement Of Cash Flows . . . . . . . . . . . . . . . . . . .

34Statement Of Changes In Equity . . . . . . . . . . .

35External Auditor Report . . . . . . . . . . . . . . . . . . . . .

36Sharia’a Advisory Board Report . . . . . . . . . . . . .

37Graphs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Content

5

The Al Baraka brand is today at the forefront of Islamic banking and emphasizes the Group’s commitment to becoming the natural global leader in Islamic banking. The brand is a strong symbol not only of the unison of all subsidiaries under a single banner, but it also stands for building trust and adding value to the lives of our customers.

ANNUAL REPORT 2016

Mr Adnan Abdalla Albasam

Mr Adnan Ahmed Yusuf

Mr Abdelrahman Ahmed

Dr Izzeldin Ibrahim Hassan

Chairman of the Board

Vice President - Chairman of theExecutive Committee and Policy

Member - Chairman of theAudit and Risk Committee

Member - Chairman of the Committee and the affairs of the advantages of

membership and corporate governanceand social responsibility

8

Board of Directors

Dr Ahmad AlbadawiMember Member Member

MemberMr Joseph Makeen IskanderDr Mekki Madani Alshibli Mr Saoud Alberier

Member Member

9

Ahmed Elamin Ahmed Abdellatif Kamal Ahmed Elzubeir

ANNUAL REPORT 2016

Mr. Adnan Ahmed Yousif• Chairman of the Board of Directors

• A highly regarded senior banker with over three decades of international banking experience. He holds a Master of Business Administration degree from University of Hull, UK. He was earlier with Arab Banking Corporation, for over 20 years and last served as Director on its Board.

• As President & Chief Executive, Mr. Yousif has led Al Baraka Banking Group (ABG) since inception, developing the Group into one of the largest and most diversified Islamic banking groups in the world operating a network of over 700 branches in 15 countries, with its Head Office in the Kingdom of Bahrain. He is also the Chairman of Al Baraka Turk Participation Bank, Banque Al Baraka D’Algerie, Al Baraka Bank Ltd. South Africa, Al Baraka Bank Lebanon, Jordan Islamic Bank, Al Baraka Bank Egypt, Al Baraka Bank Syria, Al Baraka Bank Sudan, Al Baraka Bank Pakistan Ltd., Vice Chairman of Al Baraka Islamic Bank, Bahrain and a Board member of Al Baraka Bank Tunisia and Itqan Capital in Saudi Arabia.

• Mr. Adnan Yousif was the Chairman of the Union of Arab Banks, Lebanon for two terms (2007-2013). Besides having received many international awards he is the recipient of the Medal of Efficiency, a unique honor conferred by His Royal Highness - King Hamad Bin Isa Al Khalifa, the King of the Kingdom of Bahrain during the year 2011. Mr. Yousif received the title of the CSR International Ambassador (Kingdom of Bahrain) from the CSR Regional Network. Including twice the Islamic Banker of the Year award (2004 and 2009).

• In addition, he was awarded by LARIBA American Finance House the 2012 “LARIBA Award for Excellence in Achievement”, in recognition of his leadership role in consolidating and operating the largest diversified Islamic Banking Group in the world.

• In recognition of Mr. Yousif’s outstanding contribution in the field of contemporary Islamic Finance in terms of modernizing its fundamentals in practice and theorization, the Al Jinan University of Lebanon granted him an Honorary Doctorate of Philosophy in Business Administration. Furthermore, in recognition of his efforts in evolving a unique business model that is integrated with the noble goals of Islamic Banking, Mr. Yousif has been awarded the Accolade of the Sudanese Presidency for Excellency in Social Responsibility in December 2015.

• In Dec. 2016 Mr. Adnan Yousif was decorated with the Title of “High Commissioner to preach the United Nations Sustainable Development Goals 2030”. He also won the Gold Award for Sustainable Development in recognition of his major role in the service and social responsibility programs both nationally and internationally, as well as recognition for the leading role of Al Baraka Group in the field of CSR activities at Oman International Conference on Social Responsibility 2016. Mr. Yousif has been elected during 2017 as the Chairman of Bahrain Association of Banks.

Mr . Abdelrahman Ahmed Osman• Vice-chairman of the Board and Chairman of the Executive

Committee.• Holds a master’s degree in development from Harvard

University, USA.• Joined the Ministry of Finance and the Central Bank of Sudan

and was commissioned to establish the Central Bank of Yemen.• Worked for a period as an expert in the Arab Monetary Fund

(IMF).• Established the Arab Bank for Exports and Imports and then

held the position of the general manager and president of the Board of Directors for the period 1984-1993.

• Served multiple terms as president in the Union of Sudanese Banks then the Union of African Banks.

• Served as a member of several boards of directors of banks and various companies for many periods.

• Served as a member of the Executive Committee of the Union of Arab Banks.

• Served as Chairman of the Audit Committee and Chairman of the Risk Committee at Al Baraka Bank Sudan before being appointed Vice-chairman.

Mr Adnan Abdalla Albasam• Board Member and Chairman of the Audit Committee.• Certified Public Accountant (USA).• Executive Director of Al Bassam Investment Group since 2005.• Internal Auditor at Al Baraka Islamic Bank Bahrain (2000-

2005).• Worked as the first accountant at Ernst & Young Firm.

Dr Izzeldin Ibrahim Hassan• Board Member/ Chairman of the Policy Committee.• Ph.D. in Economics from University of York - United Kingdom.• Served as Chairman of the Sudanese French Bank and many

important institutions such as the Civil Aviation Authority, and the SUNA news Agency, the General Authority for Insurance Supervision.

• State Minister of Finance (1996-2000).• Served as President of the Governing Council of PTA Bank 1996.• Member of the Board of Directors of the Central Bank of Sudan

(1994-1996).• Member of the National Transitional Council (1993-1996) and

Chairman of the Economic Committee (1995-1996).• Worked as a consultant at the Ministry of Finance -1989• Worked as Executive Director of the Arab Monetary Fund (IMF)

(1981-1989)• Worked in the International Monetary Fund (1972-1974)• Professor of Economics in Sudanese universities and has

published several academic research papers.

10

Board of Directors CVs

Mr . Saoud Mamoun Alberier• Board Member.• Bachelor of Law.• President of Mamoun Alberier Group and Saud Mamoun Alberier

Group, two of the largest Sudanese business groups known locally and internationally.

• Chairman of the Sudanese Employers’ Federation for several cycles and still occupies this position.

• Member of the International Islamic Chamber of Commerce.• Member of the Board of Directors of Al Salam Bank (Khartoum -

Bahrain).• A member of many boards of directors of companies and institutions

of Sudan.• Chairman of the Board of Directors of the Al Baraka Insurance Company

(Sudan).• Member of the National Investment Council of the Republic Presidency.• Member of the Advisory Council for the Department of Energy.• Honorary Consul of the Kingdom of Sri Lanka.

Mr . Joseph Makeen Iskander• Board Member• Bachelor of Commerce (Accounting)• Chairman of a group of locally and internationally renowned companies

covering commercial, industrial activities and multiple investment.• The agent for global brands and American and Asian companies.• He has leading contributions in society and sports.

Dr . Ahmad Albadawi M . Alamin• Board Member.• Pharmacist and a lawman.• Founder and Chairman of Amipharma Pharmaceutical Co., Ltd. It is, one

of the largest drug manufacturers and medical products in Sudan and it has important initiatives and social activities.

.• Chairman of the Medical Industrial Federation in the Chambers of In-

dustry.• Vice-chairman of the Board of Directors of the Arab Union for Produc-

ers of Medicines (based in Amman).• Awarded the Medal of Merit from the President of the Republic in May

2011.• Awarded an honorary doctorate from the University of the Al Jazeera in

October 2002 and the University of Al Ahfad in April 2001.

Dr Mekki Madani Alshibli• Board Member.• Ph.D. in economics from the University of Kent – England.• He has an experience of more than thirty years in various areas of

economic and social development, private credit and financing is-sues of Arab and African cooperation.

• Director of International Cooperation Department in the Arab Or-ganization for Agricultural Development.

• Worked as an expert in the Arab Authority for Agricultural Invest-ment and Development (AAAID).

• Worked as the Assistant Director of Operations Management of the Arab Bank for Economic Development in Africa (BADEA).

• Principal at the University of Science and Technology and the founder of the Faculty of Social and Environmental Studies and the founder of the Sudan Development Institute.

• Listed in ‘500 Founders of the 21st Century’ issued by the Interna-tional Biographical Centre in England 2002.

Ahmed Elamin Ahmed Abdellatif• Board Member• MPhil in Management – University of Cambridge, U.K.• President, Board of Directors member at The Central Trading Co.

Ltd (CTC).• Has been the Honorary Consul in Sudan, for the Republic of Sen-

egal since 2009. • Founding Director and Vice Chairman of the US-Sudan Business

Council (USSBC).• Sudanese Businessmen and Employers Federation, Board Member.• Founding President, Sudanese Young Businessmen Association

Kamal Ahmed Elzubeir• Board Member• MBA (Planning and Systems Analysis) from Odense University,

Denmark• Former General Manager at United Capital Bank Khartoum , Sudan• Served as Senior Manager and Head of Trade Finance & Financial

Institutions at The Arab Investment Company ,Bahrain• Served as Assistant General Manager at Qatar Islamic Bank, Doha,

Qatar.• Served as Division Manager at Albank Alsaudi Alhollandi – Saudi

Arabia

11

ANNUAL REPORT 2016

12

Board of Directors’ Committees

Auditing and Risk committee:Mr. Adnan Abdulla Al Bassam PresidentDr. Makki Al-Shibli civilian Vice-presidentMr. Kamal Ahmed Elzubeir MemberMr. Ahmed Elamin Ahmed Abdellatif MemberAuditing Department Manager RapporteurRisk Department Manager Rapporteur

Executive and policies committee:Mr. Abdelrahman Ahmed Osman PresidentDr. Ezzedine Ibrahim Hassan Vice-presidentMr. Saoud Mamoun Alberier MemberMr. Joseph Makeen Iskander MemberMr. Director of Audit MemberMr. Secretary General of the Board of Directors Rapporteur

Affairs of the Advantages of membership and corporate governance and social responsibility committee:Dr. Ezzedine Ibrahim Hassan PresidentDr. Ahmad Badawi Hamid Mohammed Amin Vice-PresidentMr. Abdul Rahman Ahmed Othman MemberMr. Kamal Ahmed Elzubeir in an advisory Mr. Director of Human Resources Rapporteur

Board Secretary

Mr. Mohamed Elsharief Mohamed Alamin

External Auditor

Gentlemen: Mubarak El-Awad & Co.

Sharia Supervisory Board

Professor Mohammad Sir Alkhatim Mohammad PresidentDr. Abdul Sattar Abu Ghudah MemberDr. Abd El-ilah Mohammed Ahmed Abd allah MemberDr. Hammad Mohammad Ahmad Albashir Member

Assistant General Manager

Assistant General Manager

Mr. Abdullah Khiri Hamid

Mr. AlRasheed A.alrahman Ali

Dr. Mohammed Ahmad Omer Taha

Mr . AbdulBasit AbdulRahman Osman

General Manager

Deputy General-Manager

Executive Management

13

ANNUAL REPORT 2016

TelBranchSr.

0187112202 0187112201 0187112200Burj1

0187112293 0187112292 0187112290Khartoum North2

0187112234 0187112232 0187112230Soug Arabi3

0187112262 0187112261 0187112260Omdurman4

0187112503 0187112502 0187112500South Khartoum5

0187112532 0187112531 0187112530Mughtribin6

0187112382 0187112381 0187112380Soug Libya7

0187112324 0187112322 0187112320Sajjana8

0187112356 0187112352 0187112350Hirifiain9

0187112922 0187112921 0187112920Ammarat10

0187112413 0187112411 0187112410AL-zahraa11

0187112864 0187112863 0187112860PortSudan12

0187112470Garri13

0187112563 0187112561 0187112560Soug Mahali14

0187112834 0187112831 0187112830Gadariff15

0187112623 0187112621 0187112950Meddani16

0187112593 0187112591 0187112563Hassahisa17

0187112652 0187112651 0187112650Hajj Abdalla18

0187112444 0187112441 0187112440alObaid19

0187112804Nyala20

0187112682 0187112681 0187112680Sinnar21

0187112894 0187112891 0187112890Dongla22

0187112712 0187112711 0187112710Dammazin23

0187112773 0187112771 0187112770Kosti24

0187112744 0187112741 0187112740Rabbak25

0187112951 0187112950 Aswag Omdurman26

14

Branches

Correspondent Bank Country

Al Baraka Islamic Investment Bank Manama/Bahrain

Al Baraka Turk Participation Istanbul/Turkey

Al Baraka Bank Egypt Cairo/Egypt

Al Baraka Bank Syria Damascus/Syria

Al Baraka Bank Lebanon Beirut/Lebanon

Abu Dhabi Islamic Bank Abu Dhabi/UAE

United Bank Cairo/Egypt

Tadamon Islamic Bank Sana’a/Yemen

Arab African International Bank Cairo/Egypt

Kuwait Finance House Kuwait/Kuwait

National Bank of Egypt Cairo/Egypt

Al Rajhi Banking Company Riyadh/KSA

Qatar National Bank Doha/Qatar

Commercial Bank of Ethiopia Addis Ababa/Ethiopia

15

Correspondent Banks

We believe that our values and ambitions go beyond

mere attainment of corporate size or product range and

delivery. Instead, we believe that as we build our customer

relationship based on the spirit of true partnership, our

growth will be both inevitable and natural.

Al Baraka Bank- SudanBaraka Tower

P. O. Box: 3583

Khartoum

Sudan

Telephone: + 249 187 112000

Fax: + 249 183 788585

Website: www.albaraka.com.sd

Al Baraka Banking Group

Al Baraka Islamic Bank – BahrainAl Baraka Tower

P.O. Box: 1882

Manama

Kingdom of Bahrain

Tel: + 973 17 535 300

Fax: + 973 17 533 993

www. albaraka.bh

Al Baraka Bank – Pakistan162, Bangalore Town,

Main Shahrah-e-Faisal,

Karachi,

Pakistan

Tel: +92 21 343 15851

Fax: 92 21 345 46465

www.albaraka.com.pk

Al Baraka Bank – South Africa2 Kingsmead Boulevard,

Kingsmead Office Park,

Stalwart Simelane Street,

Durban 4000,

SA

Tel: + 2731 364 9000

Fax: + 2731 364 9001

www. Albaraka.co.za

17

Al Baraka Banking Group

ANNUAL REPORT 2016

Al Baraka Bank – Lebanon2nd Floor, Center Verdan 2000,

Rashid Karameh Str.,Vardun,

Beirut, Lebanon

Tel: +9611808008

Fax: 9611806499

www.Al-baraka.com

Al Baraka Bank _ Tunisia88, Avenue Hedi Chaker 1002,

Tunis,

Tunisia

Tel: +216 717 90000

Fax: + 216 71780235

Website: www.albarakabank.com.tn

Al Baraka Bank - AlgeriaButljh Houidv neighborhood, Villa No. 1,

South by Ben Aknoun, Algiers, Algeria

Tel: + 213 21 916 450

Fax: + 213 21 916 458

www.albaraka-bank.com

Jordanian Islamic Bank - JordanP.O. Box 926225,

Amman 11190,

Jordan

Tel: +96265677377

Fax: +96265666326

www.jordanislamicbank.com

18

Al Baraka Banking GroupRepresentative OfficeRavindo Building, 10th Floor,Jalan Kebon Sirih, No. 75,Jakarta Pusat 10340,IndonesiaTel: +62213161345Fax: +62213161074www.albaraka.com

Al Baraka Bank – Egypt60, Mohie Elddin Abu Elezz Street,P.O. Box 455,Dokki, Giza,EgyptP.O. Box: 455Tel: +20237481222Fax: +2037611436 / 7www.albaraka-bank.com.eg

Al Baraka Turk Participation BankSaray Mahallesi,Dr. Adnan Buyukdeniz Caddesi, No: 6,34768 Umraniye, Istanbul,TurkeyTel: +9021166660101Fax: +902166661600www.albarakaturk.com.tr

Al Baraka Bank – SyriaAlshahbander Street,P.O. Box 100,Damascus,SyriaTel: +963114437820Fax: +963114437810www.albaraka.com.sy

Al Baraka Banking GroupRepresentative Office, Libya)Under Formation(Trepoli Tower, Tower1Floor 14, Office No.144P.O. Box 93271,Tripoli, LibyaTel: +218213362310+218213362311+218213362312www.albarakalibya.com.ly

19

ANNUAL REPORT 2016

Establishment Country

Al Baraka Insurance Company Sudan

Arab Agricultural Investment Company Sudan

Al Baraka Real Estate Management Company Sudan

Al Baraka Financial Services Company Sudan

Al Haj Abdallah Ice Factory Sudan

National Agency for Insurance and Finance of Export Sudan

Electronic Banking Services Company Sudan

Forus Development Company Ltd. Sudan

Al Baraka Exports Development Company Ltd. Sudan

20

Capital Contributions

We link the philosophical dimension of participation

and partnership and the equitable sharing of risk and

reward – upon which Islamic banking is based

ANNUAL REPORT 2016

The General Manager Speech

Al Salamu Alaukum

It is my pleasure and honour to convey to you the most

important achievements in this annual report of 2016 which includes:

- The Chairman of the Board of Directors speech;

- Local and global economy performance;

- The Bank Performance in 2016;

- External Auditor’s report and financial statements for 2016;

- Sharia’a Supervisory Board report.

Finally, I hope to extend my sincere thanks and appreciation to all who

cooperated with us to achieve the best results in 2016, especially our

valued customers, our correspondents and the employees of the bank.

Abdullah Khiri Hamid

General Manager

22

The speech of the Board of Directors to the General Assembly

In the name of them most Merciful and Compassionate

Praise be to Allah, Lord of the Worlds, and prayers and peace be upon the Seal of Prophets and Messengers, our master Muhammad and his family and

companions.

Dear Shareholders

Peace and Mercy of God be upon you

We are pleased to welcome you as we hold the annual meeting of the General Assembly of shareholders of Al Baraka Bank of Sudan.

Before we review the performance and outcomes of the Bank’s business and financial position of 2016 and the 33 annual report of the Bank, We would like to express our appreciation to the efforts exerted to lift the economic sanctions imposed on Sudan and removal from the grey list. This, in our view, represents a great opportunity for economic stability, growth and development. We also welcome reforms to improve the business conditions for private sector activities.

We hope that the efforts made will be successful in achieving progress, alleviating external debt burden and obtaining facilitated external financing from international institutions.

Dear brothers

Several negative global and regional economic indicators have had an impact on the country’s progress. The global economy has not improved in 2016, as expected as well as, the emerging economies such as China.

At the regional level, the factors of political instability and exacerbation of conflicts in the Middle East, North Africa and the Republic of South Sudan have negatively impacted growth. The sharp decline in oil and primary commodity prices has also been reflected in the economic activity levels of the exporting countries.

On the domestic level, economic activities were affected by the decline in exports and the decline in direct foreign investments, which caused a severe shortage of foreign currency resources, despite attempts to address the adverse effects of the economic blockade and cut correspondent relations with foreign banks.

Despite the unfavorable circumstances, the Bank has diversified it is profit making activities to maintain the excellent performance. The outcome of the Bank’s businesses was good, with the blessing of God, the continuous support of Al Baraka Banking Group, and the effort exerted by all. The following are the main financial indicators for the year 2016:

1. The total activity of the Bank during the year 2016, increased by 20% to reach 2.7 billion pounds against 2.2 billion pounds in 2015.

23

ANNUAL REPORT 2016

2. Deposits grew by 6% to reach1.8 billion pounds compared to 1.7 billion pounds in 2015.

3. Financing and investment operations increased by 20% to reach 1.6 billion pounds compared to 1.3 billion pounds in 2015. It is gratifying to note that the net non-performing rate is only 2% of the total financing and investment portfolio. Allocations cover about 65%, which is a good indicator.

4. The total operating income rose from 211 million pounds in 2015 to 247 million pounds, with an increase of 17%.

5. Operating expenses in 2016 amounted to 148 million pounds, with an increase of 17% over the year 2015 which was 126 million pounds, to meet the high rise in prices of goods and services.

6. The Bank attained a net profit, after Zakat, taxes and provisions of 77 million pounds compared to 59 million pounds in 2015, with a growth rate of 31%.

7. Shareholders’ equity grew in 2016 to 335 million pounds compared to 286 million pounds in 2015, with a growth rate of 17%.

8. The positive financial outcomes achieved during 2016 resulted in the improvement of a range of financial indicators. The Bank’s classification according to the early warning indicators was ‘satisfactory’, which is next to ‘strong rating’. The rate of return on assets was 2.9%, the return on equity was 23% and the rate of return on capital was 44% compared to 2.6%, 21% and 39% for the year 2015, respectively.

Dear Shareholders

In addition to the financial indicators mentioned above, the Bank has accomplished many achievements in other areas, including the following:

In line with the strategic direction of the Bank to create an attractive work environment, the Bank was successful to own strategic locations to serve as headquarters for its branches. The Khartoum North Branch building was purchased, and properties were bought for the Branches of Alamarat, Dongola and Senar. Efforts for the construction of Al Ahfad University Branch, completion of the Branches of Omdurman, Al-Sejana, Sixteen Street, and Damazin Branch stores and the implementation of the second phase of the rehabilitation of the Central Archive still continue. Our efforts are underway to find permanent headquarters for Khartoum South Branch, Alsouk Alarabi and Alhrifeen Branches. We are confident that our continuous efforts in creating a new product for provision of financial resources will help the Bank to implement two projects, the Car Parking investment project and the Bank’s Headquarters in Khartoum.

Within the framework of the provision of distinctive services to customers, the Bank has achieved considerable success in discharging its responsibility in settling and clearing all financial transactions in the Khartoum Stock Exchange. We are pleased to note that the Bank has launched Al Baraka Distinguished Deposit product that allows daily income for companies and individuals. It is considered the first of its kind in the Sudanese banking sector.

Our efforts were extended to expand electronic collection services by opening a fixed outlet at Khartoum International Airport to collect customs duties, a mobile outlet, and a Bank agency in the General Customs Authority. In addition an agency at the Ports Authority in Port Sudan was established.

We have come a long way in upgrading the technical system to improve the efficiency of operations. The actual application will start, if God willing, during the first quarter of this year.

24

The Bank gave special attention to community support programs and established social responsibility unit. It implemented many programs in the fields of health, education, housing and sports. Social funding and the university education products for students were expanded. Also training opportunities were provided.

Despite variables, the Bank continued to accomplish many achievements, as reflected in the fact that it was recognized by the ‘World Finance’, the world’s leading financial and banking magazine in its evaluation of financial institutions around the world as “Best Islamic Bank” in Sudan for the fourth year in a row. Al Baraka Bank of Sudan wins this award as the culmination of its success in consolidating Islamic banking and in recognition of its progress in excellence and adherence to the best international standards and practices in providing a reliable banking services.

Dear Shareholders

Before concluding, I would like to express our deep appreciation to all those who contributed to the achievement of these good results, particularly the Government of the Republic of Sudan, the Central Bank of Sudan, the Khartoum Stock Exchange and the General Registrar of Companies for their cooperation with us and Al Baraka Banking Group for their continuous support. We also thank the Shari’a Supervisory Board and external auditors for their guidance. I would also like to thank our valued shareholders for their continued trust and our customers whose trust and loyalty to this Bank make us proud. I would also like to thank the members of the Board of Directors, the Executive Management Team and the employees for their commitment and dedication. We hope to continue our success in the coming years.

Finally our last prayer is to thank God, Lord of the Worlds Peace and Mercy of God be upon you

Chairman of the Board

25

We at Al Baraka believe that banking has, or ought to have, a crucial role to play in society, one in which as bankers we have an incredible responsibility of stewardship for the resources placed in our hands. To meet this responsibility and use these resources wisely, we rely on Shari’a principles to guide us as we participate in our customers’ successes, sharing in the social development of families, businesses and society at large.

International EconomyReports indicate that the rate of growth of global economic activity is expected to decline by 3.4%

to 3.1 % in 2016 due to the slowdown in the growth of activities in the United States, the uncertainty that prevailed in the Eurozone due to Britain’s exit from the European Union, and the growth of emerging markets and developing economies. The growth was also affected by the continued decline in oil prices, political tensions and internal conflicts in the Middle East, North and Central Africa. Forecasts expect the situation to improve in 2017 to reach 3.4%.

The International Monetary Fund forecast indicate the following:

- The growth rate in the United States will fall to 1.6% in 2016 from 2.1% in 2015 and is expected to rise to 2.2% in 2017.

- Growth in the Eurozone will fall to 1.7% from 2% in 2015 and is expected to fall to 1.5% in 2017.

- Growth in emerging markets and developing economies will reach 4.2 % in 2016 from 4 % in 2015 and is expected to reach 4.6 % in 2017.

- China’s economy slowed down to 6.6% from 6.9% in 2015 and its growth is expected to decline to 6.2% in 2017.

Local EconomyThe local economy performance during the year 2016 had been affected by many global, regional and

local variables. The most important of which are the economic and banking blockade, the decline in the inflow of foreign investments and the impact on South Sudan oil transit fees due to conflicts in production areas and the lowering of oil prices. Also the local economy was affected by severe shortage of foreign exchange resources, deterioration of the pound exchange rate against foreign currencies especially in the parallel market, and the accumulation of external debt and its benefits, in addition to the repercussions of the security disturbances in the neighboring countries, especially the State of Southern Sudan, and the high costs of exchange for security as a result of security imbalances in some areas of conflict.

Despite these difficulties, however, the performance of the fiscal year 2016 showed an improvement in the macroeconomic indicators. The indicators show the following:

- Despite the decline in the economic growth rate to 4.9% compared to 5.3% for the year 2015, the deficit in the balance of trade fell to 4.2 billion dollars in 2016 compared to 4.9 billion dollars in 2015. The total deficit of the balance is expected to be about 13.5 billion pounds, of 1.9% of the total GDP.

- A surplus of about 374 million dollars in the balance of payments for the year 2016 is achieved compared to 38 million dollars in 2015.

- The average inflation rate declined from 17.9% in December 2015 to about 15.7% in December 2016.

- The volume of the money supply in 2016 reached 121 billion pounds, 29% higher than the year 2015, which was 94 billion pounds.

- The SDG exchange rate against the dollar was 6.9 in 2016 compared to 6.09 in 2015.

27

The Economic Situation

ANNUAL REPORT 2016

28

Banking Sector

In order to achieve the national objectives of macro economy and banking safety of the Sudanese

banking sector, the Central Bank of Sudan continued to regulate and control banks, as follows:

- Introduce a prudent monetary policy to reduce excess liquidity to contain inflation.

- Enhance financial coverage through policies supporting banks in expanding their services based on

the applications of various banking technologies and extending customer service beyond official and

holiday hours, as well as encouraging the opening of new branches.

- Make positive moves to ease the banking siege on Sudan.

- Continue to activate and apply the regulatory procedures required to combat money laundering and

terrorist financing in the banking system.

- Within the framework of the Central Bank’s efforts to attract foreign exchange resources, a mechanism

has been applied whereby an incentive is added to the purchase and sale prices for the Sudanese sector

abroad and exporters. Also priorities were set for resources purchase in foreign currency in importing

the inputs of the pharmaceutical industry and production inputs for the agricultural and livestock

sector. The use of gold exports revenue was also determined.

Our Success and that of each of our customers are

as intertwined as our jointly held beliefs. Taking part in

the joint effort is therefore our reward.

ANNUAL REPORT 2016

The table below shows the most important indicators of the financial performance of the Bank during the period 2012-2016

)Amounts in millions of SDG(

السنة 2012 2013 2014 2015 2016

Total activity 1484 1853 2109 2241 2692

Annual growth rate % 58 % 25 % 14 % 6 % 20

Total deposits 1047 1240 1474 1684 1784

Annual growth rate % 52 % 18 % 19 % 14 % 6

Investment and financing operations 868 1072 1192 1303 1561

Annual growth rate % 46 % 24 % 11 % 9 % 20

Total shareholders› equity 147 194 255 286 335

Annual growth rate % 9 % 32 % 31 % 12 %17

Operating expenses 111 142 161 211 247

Annual growth rate % 41 % 28 % 13 % 31 % 17

Provisions 60 82 96.5 125.5 147.8

Annual growth rate % 14 % 37 % 17 % 30 % 18

Net profit 19.8 50 51.5 59.1 76.6

Annual growth rate % 3 % 152 % 3 % 14 % 30

30

Bank Performance

31

ALBARAKA BANK - SUDAN

STATEMENT OF FINANCIAL POSITIONAs at 31 December 2016

ASSEETS2016SDG

)Thousands(

2015SDG

)Thousands(

Cash and cash equivalents 69,510 101,160

Central Bank of Sudan - Statutory cash reserve 575,546 520,444

Sale receivables )net( 964,566 799,107

Investments in securities and shares )net( 309,388 271,736

Musharaka financing )net( 154,186 104,431

Other investments and financing )net( 109,316 96,829

Ijarah muntahia bittamleek )net(†)ijarah†ending with ownership transfer( 243 __

Fixed assets )net( 245,144 160,929

Investments in affiliates and subsidiaries 17,615 14,518

Other assests )net( 241,914 166,549

Leasehold bulidings improvements 3,708 4,819

Total assets 2,691,137 2,240,522

“LIABILITIES, UNRESTRICTED INVESTMENT AND EQUITY “

LIABILITIES

Customers’ current and saving accounts 1,284,139 1,169,119

Other liabilities 586,886 270,016

1,871,025 1,439,135

UNRESTRICTED INVESTMENT ACCOUNTS 484,691 515,255

EQUITY

Share capital 176,555 151,352

Retained earnings 68,989 53,177

Reserves 89,877 81,603

Toatal Shareholders’ Equity 335,421 286,131

TOTAL LIABILITIES AND UNRESTRICTED INVESTMENT ACCOUNTS AND EQUITY 2,691,137 2,240,522

Contra accounts 186,641 308,687

General Manager Vice PresidentAbdallah Khairy Hamid Abdelrahman Ahmed

ANNUAL REPORT 2016

ALBARAKA BANK - SUDAN

INCOME STATEMENTAs at 31 December 2016

INCOME2016SDG

)Thousands(

2015SDG

)Thousands(

Income from sale receivables 126,657 114,885

Income from investments 78,962 78,838

205,620 193,724

Return on unrestricted investment deposits (34,595) (22,805)

Net income from sale receivables and investments 171,024 170,919

Income from banking fees and commisions 37,309 35,833

Other income 38,881 3,958

76,190 39,791

Total operating income 247,215 210,710

EXPENSES

Staff cost 84,082 72,481

Depreciation and amortization 10,014 9,033

Central Bank of Sudan fines 15.75 28

General and administrative expenses 53,677 43,942

Provision for financings and investments 7,836 12722

TOTAL EXPENSES 155,624 138,206

Net Income for the year before Tax and Zakat 91,591 72,504

Provision for Zakat 922 2,650

Provision for Business Profit Tax 14,015 10,769

NET INCOME FOR THE YEAR 76,654 59,085

Earning per share 1.52 1.37

General Manager Vice PresidentAbdallah Khairy Hamid Abdelrahman Ahmed

32

33

ALBARAKA BANK - SUDAN

STATEMENT OF CASH FLOWSYear Ended 31 December 2016

Cash Inflow From operating activities:2016SDG

)Thousands(

2015SDG

)Thousands(

Net income for the year 76,654 59,085 Adjustments for non-cash items:-

Gain on sale of fixed assets (359) (265)Depreciation and amortization 10,014 9,033 Return on unrestricted investment deposits 34,595 22,804 Provisions:-

Zakat 922 1,598 Business Profit Tax 14,015 10,769 Financings and investments 7,836 12,722 Other provisions (27,161) 1,515 Total cash inflow from operating activities 116,515 117,261Cash Inflow From investing activities:

Central Bank of Sudan - Statutory cash reserve (55,102) 29,890 Sale receivables (171,316) (73,750)Musharaka financing (50,572) (27,500)Investments in securities and shares (37,652) (50,847)Ijarah muntahia bittamleek )net(†)ijarah†ending with ownership transfer( (261) __Other assets (75,244) (35,283)Intangible assets 902 283 Investments )Net( (12,487) 33,691 Purchase of fixed assets (92,968) (34,627)Investment in affilliates and subsidiaries (3,097) (6,258)Net cash used in investing activities (497,797) (164,401)Cash inflow from financing activities:-

Customers’ current and saving accounts 80,425 102,366 Other liabilities 301,933 (175,606)Urestricted investment accounts (30,565) 108,251 Capital 25,203 22,235 Reserve on re-evaluation of available for sale investments and foreign cur-rency

608 (1,166)

Cash dividends (27,973) (24,106)Net change in surplus on revaluation of fixed assets __ (1,000)Net cash from finacing activities 349,631 30,974

DECREASEIN CASH AND CASH EQUIVALENTS (31,650) (16,166)Cash and cash equivalents at beginning of the year 101,160 117,326 CASH AND CASH EQUIVALENTS AT 31 DECEMBER 69,510 101,160

ANNUAL REPORT 2016

ALBARAKA BANK - SUDAN

STATEMENT OF CHANGES IN EQUITYYear Ended 31 December 2016

Share capitalStatutory

reserve

Revaluation of fixed assets

reserve

Revaluation of

investment available for sale reserve

Retained earnings

Total

SDG(Thousands)

Balance at 1 January 2016 151,352 30,190 21,181 30,233 53,176 286,132

Issued share capital 25,203 - - - (25,203) -

Unrealized gain )fair value( - - - 608 - 608

Revaluation of fixed assets reserve - - - - - -

Net income for the year - - - - 76,654 76,654

Transfer to statutory reserve - 7,665 - - (7,665) -

Dividends - - - - (27,973) (27,973)

Balance at 31 December 2016 176,555 37,855 21,181 30,841 68,989 335,421

34

35

External Auditor Report

ANNUAL REPORT 2016

Sharia’a Advisory Board Report

36

2241

2019

1853

1484

2692

1684

1474

1240

1047

1784

1303

1192

1072

868

1561

286

255

194

147

335

Total Activity)Amounts in millions of SDG(

Investment and Financing Operations)Amounts in millions of SDG(

Total Shareholders Equity)Amounts in millions of SDG(

Graphs

Total Deposits)Amounts in millions of SDG(

37

ANNUAL REPORT 2016

211

161

142

111

247

125.5

96.5

82

60

147.8

59.1

51.5

50

19.8

76.6

Operating Income)Amounts in millions of SDG(

Operating Expenses)Amounts in millions of SDG(

Net profit)Amounts in millions of SDG(

39

We view money as a means to capitalise on opportunities and create a better society for all. Money becomes the conduit by which we enter into new opportunities together and take part in common effort for mutual reward; as steward of the resources entrusted to us, our efforts contribute to building the community, both at home and in the wider world. We call this concept:

“Beyond Banking.”