The Arab Energy Fund, a leading financial institution dedicated to the energy sector in the Middle East and North Africa, has reported a major financial boost this year, raising more than $2 billion through bond issuances.
The move crowns three consecutive years of record profits and double-digit balance sheet growth, with further issuances planned for 2026 and beyond.
In an interview with Asharq Al-Awsat, Chief Financial Officer Vicky Bhatia said the fund’s business model rests on three pillars: corporate banking, which accounts for half of its balance sheet; treasury activities, representing around 35 percent; and equity investments, which contribute about 12 percent.
He noted that all three lines of business delivered strong results in the first half of the year, with momentum expected to carry into the second half.
The fund, formerly known as APICORP, posted a 7 percent increase in net profit during the first six months of 2025, reaching $129 million compared to $121 million a year earlier. Bhatia attributed the rise to solid operating income.
He stressed that the institution had come off three straight years of record profitability, highlighting that the balance sheet had been expanding at double-digit rates over the same period.
He expressed confidence that this momentum would persist, supported by a strong business pipeline extending into 2026 and beyond.
According to Bhatia, three factors underpin the robust performance: consistent balance sheet growth across business lines, improvements aligned with the fund’s strategy, and strict operational discipline. He also noted that the current interest rate environment has been favorable.
Total assets climbed 15 percent year-on-year to $12 billion, reflecting growth in both corporate banking and treasury portfolios. Shareholders’ equity increased 6.3 percent to $3.45 billion, while total liabilities rose 18.7 percent to $8.59 billion. Non-performing loans fell to 0.3 percent of the portfolio.
One of the most significant indicators, Bhatia said, was the cost-to-income ratio, which stood below 18 percent, well below regional peers. This efficiency, he explained, had a substantial positive impact on overall results.
On asset quality, he stressed that the non-performing loan ratio at 0.3 percent reflects the fund’s cautious credit decisions. He explained that the institution does not anticipate major changes to its risk profile, and current measures should ensure that problem loans remain at minimal levels.
The capital adequacy ratio stood at 29.7 percent as of June 30, 2025, a figure far above regional benchmarks. The fund intends to allow this ratio to moderate slightly while continuing to manage it at levels that ensure strength and resilience.
Regarding interest rate movements, Bhatia explained that most of the fund’s operations are based on variable rates across both assets and liabilities. This structure, he said, shields the fund from significant exposure to rate fluctuations.
While acknowledging that a broad decline in interest rates would naturally affect all financial institutions, he indicated that the Arab Energy Fund expects only limited impact on its results.
