Gulf International Bank B.S.C. (GIB) reported consolidated net income after tax of $73.1 million for the three months ended 31st March 2005, representing a $33.9 million or 86 per cent increase over the prior year period. The exceptionally strong year-on-year advance reflected continued growth in the Group’s merchant banking revenues.
The robust pace of economic activity and growth throughout the Gulf region continued to provide a dynamic operating environment for the bank. Net interest income at $46.2 million was 7 per cent up on the prior year period. This was principally due to higher GCC loan volumes and margins, and a more favourable interest rate environment. Other income at $54.8 million was $20.9 million or 62 per cent up on the prior year.
Other income benefitted in particular from profits arising on the restructuring of the tenor of the bank’s fixed income investment portfolio. Investment banking and management fees were also 8 per cent up on the prior year, representing an important and growing contributor to the Group’s non-interest earnings. Total expenses were only marginally up on the prior year reflecting the effective management of costs. Net income is reported after a $2.3 million net writeback of provisions for credit losses (2004: $8.8 million charge). The writeback was attributable to provision releases arising on recoveries from a number of impaired loans.
Consolidated total assets were $20.0 billion at the quarter end, being $0.8 billion up on the 2004 year end level. This was attributable to increases of $0.3 billion and $0.5 billion in loans and advances, and placements respectively. The rise in placements reflected the high level of liquidity prevailing during the period. This contributed to a $0.6 billion increase in deposits from customers.
Shareholder’s equity amounted to slightly less than $1.6 billion following the declaration of a $75.1 million dividend in respect of 2004 profits. The Group’s balance sheet-related financial ratios continue to remain strong with the liquid assets ratio standing at a particularly high 69.4 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) 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.