gulf international bank reports - first quarter profits of $71.8 million
Gulf International Bank B.S.C. (GIB) reported consolidated net income after tax of $71.8 million for the three months ended 31st March 2007. This compared to net income of $75.5 million in the first quarter of 2006. A year-on-year increase in gross income resulting from continuing improvements across GIB’s principal business activities was offset by an increase in operating expenses attributable to adverse exchange rate movements and higher performance-related remuneration. Net interest income at $70.1 million was $14.3 million or 26 per cent up on the prior year period. This was principally due to continued growth in the Group’s GCC lending activity and the benefit derived from a higher interest rate environment. Fee and commission income at $17.0 million was 8 per cent up on the prior year. Fee and commission income represents an important and growing contributor to the Group’s earnings. The year-on-year increases in the strategically important interest and fee income categories offset decreases in trading income and profits on available-for-sale securities. Trading income and profits on available-for-sale securities were at exceptionally high levels in the first quarter of the prior year. Total operating expenses were $6.3 million up on the prior year reflecting the impact of the weaker US Dollar on foreign currency denominated expenses and higher performance-related remuneration. Net income is reported after a $1.4 million net release of provisions for credit losses. The provision releases arose on recoveries received from impaired credit facilities.
Consolidated total assets were $26.2 billion at the quarter end, being $1.4 billion up on the 2006 year end level. This was attributable to increases of $0.9 billion in both loans and placements. The rise in placements reflected the exceptionally high level of liquidity currently prevailing within the region, contributing to a $1.4 billion increase in deposits from customers. Total equity increased to over $2.2 billion following a capital increase of $500 million in March and the payment of a $128 million dividend in respect of 2006 profits. The capital increase contributed to a strong capital adequacy ratio of 15.9 per cent at the quarter end being well above the Central Bank of Bahrain’s minimum ratio of 12 per cent.
Gulf International Bank (GIB) is a leading merchant bank in the Middle East with its principal focus on the Gulf Cooperation Council (GCC) states. The six GCC governments, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, own 72.5 per cent of the bank, while the Saudi Arabian Monetary Agency (SAMA) owns 27.5 per cent. In addition to its main subsidiary Gulf International Bank (UK) Ltd., the Bank has branches in London, New York, Riyadh and Jeddah, as well as representative offices in Beirut and Abu Dhabi.
GULF INTERNATIONAL BANK B.S.C.
CONSOLIDATED BALANCE SHEET
Cash and other liquid assets
Due from brokers
Placements with banks
Loans and advances
Deposits from banks
Deposits from customers
Securities sold under agreements to repurchase
Securities sold but not yet purchased
Senior term financing
Subordinated term financing
Total liabilities & equity
GULF INTERNATIONAL BANK B.S.C.
CONSOLIDATED STATEMENT OF INCOME
Three months ended
Net interest income
Provisions for securities
Provisions for loans and advances
Net interest income after provisions
Fee and commission income
Profits on available-for-sale securities
Other operating expenses
Net income before tax
Taxation charge on overseas activities
Net income after tax
Earnings per share