Gulf International Bank B.S.C. (GIB) reported consolidated net income after tax of $106.9 million for the nine months ended 30th September 2004, representing a $20.3 million or 23.4 per cent increase over the prior year period.
The significant year-on-year increase was principally attributable to continued growth in investment banking revenues and a lower level of provisions. The reduction in provisions reflected the benefits derived from the bank’s strategic focus on the GCC region and the effective risk diversification provided by the bank’s high quality, investment grade-rated securities portfolio.
Net interest income at $128.6 million was $3.1 million up on the prior year period reflecting higher margin income from the bank’s core GCC banking activity as a result of higher loan volumes and an improvement in credit spreads. The increase in volumes and spreads have been driven in particular by the ongoing development of the bank’s project finance and specialised lending activities.
GIB is a leading provider of project finance in the GCC. Other income at $75.4 million was 19 per cent lower than in the prior year period. Within other income, a further significant advance was recorded by investment banking and management fees. Investment banking and management fees at $14.0 million for the period were 29 per cent up on the prior year reflecting continued positive growth momentum derived from the bank’s strategic emphasis on GCC-related merchant banking activities. Profits on available-for-sale securities were also $5.6 million or 40 per cent up on the prior year. These positive developments were, however, more than offset by lower trading revenues reflecting a considerably more volatile and less favourable market environment than in 2003. Total expenses were in line with the prior year. Benefits derived from measures to further improve cost efficiencies offset the negative impact on expenses resulting from unfavourable exchange rate movements.
Consolidated total assets at the quarter end were $18.3 billion, being $1.0 billion up on the 2003 year end level. This reflected a $1.0 billion increase in loans and advances. Deposits from customers increased by $0.7 billion or 14 per cent over the 2003 year end level.
Deposits from banks decreased by a similar amount due to the associated lower requirement for interbank funding. Term financing also increased by a further $0.2 billion to total $1.7 billion at the quarter end. The Group’s balance sheet-related financial ratios remained strong with the liquid assets ratio standing at a particularly high 72.2 per cent. Shareholder’s equity at the end of September 2004 was $1.5 billion, representing 8.2 per cent of total assets.
GIB is a GCC focused merchant bank headquartered in the Kingdom of Bahrain. The consolidated statements of income and consolidated balance sheet are attached. (menareport.com)
© 2004 Mena Report (www.menareport.com)
