MANAMA: Gulf International Bank (GIB) recorded consolidated net income after tax of $117.9 million last year, up $13.4m, or 13 per cent, on the prior year.
Net income after tax in the fourth quarter was $20.9m compared with $19.9m in the fourth quarter of 2011.
"I am pleased with the progress made in the implementation of GIB's new strategy, which aims at a total transformation of the way the bank conducts its business and will take it into new frontiers of sophisticated banking," said chairman Jammaz Al Suhaimi.
"The strategy aims to transform GIB into a pan-GCC universal bank incorporating a unique retail bank offering.
"The strategy implementation has involved the restructuring of the wholesale banking activity and preparations for the launch of a new retail banking business which are now in an advanced stage," he said.
"We believe that these measures will, within a few years, achieve the levels of profitability and return on equity in line with the expectations of our shareholders.
"The new institution will also benefit from more diversified and stable funding, thus reducing volatility and minimising the effects of external shocks.
"I am confident that the bank is well placed to take advantage of new business opportunities, continue its key role in Saudi Arabia and the region as a leading financial institution, and ensure prosperity for all its stakeholders," he added.
"We are delighted to report continued profitability growth in 2012 despite increased costs associated with the investment in the future of the bank through new strategic initiatives," said chief executive Dr Yahya Alyahya.
"GIB's robust funding position during 2012 reflected the confidence that the bank's customers and counterparties have in its strong ownership and financial strength.
"This was clearly demonstrated when GIB issued a $500m five-year senior unsecured bond in December at one of the lowest coupons for a five-year US dollar senior unsecured debt issue by a bank in the Middle East and North Africa region.
"The bond issue was 3.5 times oversubscribed, even at a highly competitive pricing level, providing a conclusive endorsement of the international investor's confidence in GIB's strong financial position," he said.
"GIB has been frequently recognised for its commitment to professionalism and excellence, and the very best in customer service," he added.
"In 2012, the bank was presented with a number of awards, including two from Banker magazine - Most Innovative Investment Bank in the Middle East, and Deal of the Year for Islamic Finance Middle East category.
"New York-based Global Finance magazine also selected GIB as Best Investment Bank in Bahrain for 2012, the second year in which GIB has been selected for this award," he added.
"Underscoring GIB's financial performance was the re-affirmation of the bank's long-term issuer ratings by Fitch, Moody's and Standard & Poor's.
"Also, and most importantly, in March 2012, Fitch rating agency upgraded GIB's Viability Rating to 'BBB-' from 'BB+'. "The upgrade in the rating reflected Fitch's view that there had been a significant improvement in the bank's risk profile and a transformation in its balance sheet, as well as having a strong liquidity position," he said.
"It was particularly pleasing as it represented one of the very few rating upgrades of a bank since the financial crisis of 2007 to 2008," he added.
"The rating agencies noted GIB's strong ownership and capitalisation, improved liquidity, and conservative provisioning," he said.
"Such recognition constitutes a positive independent endorsement of the proactive and conclusive actions taken by GIB and its shareholders to address the challenges created by the global financial crisis," he added.
Dr Alyahya said the bank's Basel 2 Total and Tier 1 capital adequacy ratios at December 31 were 20.1pc and 17.4pc respectively.
"These are both exceptionally high by international comparison, underscoring the bank's intrinsic financial strength," he added.