At their recent meeting, the Board of Directors of Gulf International Bank B.S.C. (GIB) approved the consolidated financial results for the year ended 31st December 2004.
Consolidated net income after tax at $150.2 million for the year was $44.1 million or 42 per cent up on the prior year. This represented the highest ever result in the bank’s history. The strong performance reflected further improvements across all of the bank’s principal business activities, demonstrating the continued success of the Group’s GCC-focused merchant banking strategy.
The significant year-on-year increase in the Group’s profit was attributable to increases in both interest and non-interest earnings, the containment of expenses, and a lower level of provisions. The increase in interest earnings was principally due to significantly higher loan volumes and margins, related in particular to GCC project and structured financings.
In this context, GIB again successfully maintained its position as the leading provider of project and structured finance services in the MENA region in 2004. Non-interest income benefited from strong fee-based income derived from the Group’s strategically important merchant banking activities, including asset and fund management and corporate advisory. Investment banking and management fees were 26 per cent up on the prior year. Net income is reported after provisions for credit losses of $23.8 million (2003: $55.2 million).
Consolidated total assets rose to $19.1 billion at the end of 2004, representing an increase of $1.8 billion or 10 per cent over the prior year end. The increase was principally attributable to significant growth in the loan portfolio. Loans and advances rose by $1.5 billion during the year to $5.3 billion at the year end.
This reflects GIB’s position as the leading financier and arranger of specialised lending within the GCC, including petrochemical and gas projects, as well as shipping and aircraft finance, and Islamic finance. Shareholders’ equity amounted to $1,534.7 million at the 2004 year end exceeding $1.5 billion for the first time. The BIS risk asset ratio at 31st December 2004 was 11.6 per cent being very comfortably above the regulatory minimum of 8 per cent. As recognised by the international credit rating agencies, the Group’s balance sheet-related financial ratios are exceptionally strong with the Liquid Assets Ratio standing at a particularly high 70.8 per cent.
The 2004 consolidated financial statements are subject to ratification at GIB’s 28th General Assembly meeting and will be available immediately thereafter.
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) and J. P. Morgan Overseas Capital Corporation own 22.2 per cent and 5.3 per cent respectively. In addition to its main subsidiary Gulf International Bank (UK) Ltd., the Bank has branches in London, New York, Riyadh and Jeddah, in addition to representative offices in Beirut and Abu Dhabi.