AAFS to Finalise Acquisition of BFC Group by End of March

Aiming to become leading regional powerhouse, Dubai-based Al Ansari Financial Services (AAFS) on Monday said that it expects finalising the acquisition of BFC Group Holdings in Bahrain, strengthening the company’s position as a premier provider of foreign exchange and remittance services across the GCC region.

The rationale behind the acquisition of BFC Group for $200 million is to become the largest remittance and exchange provider in GCC region by branch network with over 410 branches (60% increase on AAFS current branch network) and supported by a combined around 6,000 employees (25% increase on AAFS current workforce).

AAFS Group Chief Financial Officer Faisal Anwar said that the company plans to become #1 player in Bahrain market, #3 player in Kuwait market, and a sizeable player in India market and provide a strong foundation for entry into the new markets, utilizing BFC’s established network, local market knowledge and customer relationships.

“The proposed merger will also strengthen our market position by expanding the customer base and increasing our market share, positioning AAFS as a formidable market leader in GCC region with broader capabilities. It will help the company diversify its geographic footprint to reduce reliance on existing markets and enhance the stability of our revenue streams,” he explained.

In a bourse filing with Dubai Financial Market (DFM) AAFS, which presented its annual report for 2024, said that the merger will help in cost synergies and operational efficiencies from streamlined operations, shared services, optimisation of the branch network and economies of scale.

Additionally, AAFS also expects the full integration of Al Ansari Exchange in Kuwait to be completed by end of this month.

Financial Performance

Faisal Anwar said that the company has achieved a 2% increase in overall transaction volume, reaching a record 50 million transactions, demonstrating their ability to attract and retain customers across its diverse service offerings.

AAFS also continued to expand its digital footprint, with a 23% y-o-y increase in digital transactions. This highlights our commitment to innovation and meeting the evolving needs of our tech-savvy customers.

Net profit after tax for 2024 declined 18% y-o-y to $110.54 million due to the increase in manpower (including the Emiratisation programme) and operational costs for opening new branches, as well as the introduction of Corporate Tax, effective 1 January 2024.

The strategic focus of AAFS on digital transformation and optimised branch network expansion resulted in a 29% reduction in Capital Expenditure (CAPEX) during last year. Cash Flow from operations after adjusting for CAPEX amounted to $130.15 million, with a 94% EBITDA to cash conversion rate.

AAFS remained financially strong with a growing asset base, ample liquidity, and a zero debt-to-equity ratio. This strong foundation has positioned the company well for future expansion and investment opportunities.

Dividends

The company plans to disburse a second dividend payment of $42.88 million for H2 of 2024, subject to shareholder approval at the upcoming annual general meeting, demonstrating its commitment to deliver consistent and sustainable returns. This brings the total dividend for 2024 to $85.77 million, representing almost 78% of the net profit after tax for the year.