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 $128 million dividend in respect of 2006 profits. The capital increase contributed to a strong capital adequacy ratio of 15.9 per cent at the quarter end being well above the Central Bank of Bahrain’s minimum ratio of 12 per cent.
Gulf International Bank (GIB) is a leading merchant bank in the Middle East with its principal focus on the Gulf Cooperation Council (GCC) states. The six GCC governments, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, own 72.5 per cent of the bank, while the Saudi Arabian Monetary Agency (SAMA) owns 27.5 per cent. In addition to its main subsidiary Gulf International Bank (UK) Ltd., the Bank has branches in London, New York, Riyadh and Jeddah, as well as representative offices in Beirut and Abu Dhabi.
GULF INTERNATIONAL BANK B.S.C.
CONSOLIDATED BALANCE SHEET
At 31.3.07
At 31.12.06
US$ millions
US$ millions
ASSETS
Cash and other liquid assets
228.1
268.2
Due from brokers
749.5
950.9
Placements with banks
5,220.2
4,322.5
Trading securities
2,008.1
2,186.1
Available-for-sale securities
8,356.8
8,422.9
Loans and advances
9,049.5
8,145.0
Other assets
538.8
491.6
Total assets
26,151.0
24,787.2
LIABILITIES
Deposits from banks
5,276.5
5,704.0
Deposits from customers
12,610.4
11,163.7
Securities sold under agreements to repurchase
2,294.1
2,219.6
Securities sold but not yet purchased
719.6
862.7
Other liabilities
590.3
563.5
Senior term financing
1,823.1
1,867.1
Subordinated term financing
550.0
550.0
Total liabilities
23,864.0
22,930.6
EQUITY
Share capital
1,500.0
1,000.0
Share premium
7.6
7.6
Reserves
352.2
365.9
Retained earnings
427.2
483.1
Total equity
2,287.0
1,856.6
Total liabilities & equity
26,151.0
24,787.2
GULF INTERNATIONAL BANK B.S.C.
CONSOLIDATED STATEMENT OF INCOME
Three months
ended
Three months ended
31.3.07
31.3.06
US$ millions
US$ millions
Interest income
340.3
223.7
Interest expense
270.2
167.9
Net interest income
70.1
55.8
Provisions for securities
(0.2)
1.4
Provisions for loans and advances
(1.2)
(0.4)
Net interest income after provisions
71.5
54.8
Fee and commission income
17.0
15.8
Trading income
12.8
22.7
Profits on available-for-sale securities
7.9
13.2
Other income
1.2
1.3
Total income
110.4
107.8
Staff expenses
27.6
20.2
Premises expenses
2.4
2.0
Other operating expenses
6.8
8.3
Operating expenses
36.8
30.5
Net income before tax
73.6
77.3
Taxation charge on overseas activities
1.8
1.8
Net income after tax
71.8
75.5
Earnings per share
US$0.07
US$0.08
