Gulf International Bank B.S.C. (GIB) reported consolidated net income after tax of $113.5 million for the six months ended 30th June 2005, representing a $46.8 million or 70 per cent increase over the prior year period. The exceptionally strong year-on-year advance reflected increases in all income categories, although in particular to a significant increase in non-interest earnings.
Net interest income at $89.0 million was 4 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 $95.7 million was $47.9 million up on, or twice, the prior year level. This strong advance was in part attributable to profits generated by the Group’s various trading activities. The strong trading revenues were achieved despite challenging international markets. This outcome was assisted by the application of sophisticated and disciplined risk management techniques. Investment banking and management fees were also 35 per cent up on the prior year, with further advances being recorded in particular in fee income from corporate finance and asset management activities. This reflects the continued success of the bank’s merchant banking strategy. A $7.9 million year-on-year increase in total expenses was partly due to one-off costs associated with restructuring initiatives. Net income is reported after a $1.8 million net charge for provisions for credit losses. This compared to a charge of $7.6 million in the first half of 2004.
Consolidated total assets were $20.7 billion at the half year end, being $1.5 billion up on the 2004 year end level. This was attributable to increases of $1.0 billion and $0.9 billion in placements, and loans and advances respectively. The rise in placements reflected the high level of liquidity prevailing during the period. This contributed to $1.3 billion increase in deposits from customers. Shareholder’s equity amounted to a $1.6 billion following the payment 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 66.8 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.
