Gulf International Bank B.S.C. (GIB) reported consolidated net income after tax of $193.3 million for the nine months ended 30th September 2006, representing a $28.9 million or 18 per cent increase over the prior year period. The year-on-year advance reflected increases in both interest and non-interest earnings, a decrease in expenses, and a lower level of provisions for credit losses.
Net interest income at $149.1 million was $15.0 million or 11 per cent up on the prior year period. In particular, a strong advance was recorded in interest earnings generated by the Bank’s GCC lending activities as a result of significantly higher loan volumes. The increase in loan volumes has been driven by the ongoing development of the bank’s project finance and specialised lending activities. GIB is the leading provider of project and structured finance services in the Middle East and North Africa region. Other income at $147.7 million was $12.3 million or 9 per cent up on the prior year. Year-on-year increases were recorded in almost all non-interest income categories. Within other income, investment banking and management fees at $33.1 million were 41 per cent up on the prior year. GIB continues to be the pre-eminent regional provider of financial advisory services for structured financing, privatisations, IPOs, and mergers and acquisitions. The year-on-year increase in investment banking fees was also partly attributable to further growth in assets under management, which increased to $24 billion at the third quarter end. GIB is the largest Arab-owned commercial fund manager. Commissions on letters of credit and guarantee were 35 per cent up on the prior year reflecting positive growth momentum in GCC-related activities. Total expenses were $1.0 million down on the prior year due to the ongoing effective management of costs. Net income is reported after a $3.2 million net provision release. The provision release arose on the repayment of impaired loans. At the end of September, past due loans amounted to only $26.9 million, representing less than 0.5 per cent of gross loans.
Consolidated total assets were $24.5 billion at the third quarter end, being $1.7 billion up on the 2005 year end level. This was principally attributable to a further increase in loans and advances. Loans and advances increased by $1.9 billion during the nine months to $8.1 billion reflecting the continued robust economic expansion within the GCC. The high level of liquidity prevailing within the region contributed to a $1.6 billion increase in deposits from customers. Total equity amounted to $1.8 billion after the payment in March of a $101.5 million dividend in respect of 2005 profits. The Group’s balance sheet-related financial ratios continue to remain strong with the liquid assets ratio standing at a particularly high 64.4 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) 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, in addition to representative offices in Beirut and Abu Dhabi.
