GIB's net income rises 4.6pc to $101.5 million  

MANAMA: Gulf International Bank (GIB) registered a 4.6 per cent increase in consolidated net income to $101.5 million for the first nine months of the year, compared with the prior year period.

Net income after tax in the third quarter was $40.9m, GIB said yesterday.

Total income at $211.2m was 9pc up on the prior year with year-on-year increases recorded in all income categories with the exception of foreign exchange and trading income.

Net interest income at $119.7m for the nine months was 10pc higher than the prior year period.

The year-on-year increase in net interest income principally reflected increases in both loan volumes and loan margins.

The bank said it reoriented lending activities from transactional-based long-term project and structured finance to relationship-based commercial and trade finance requirements of large and mid-cap corporates.

During the first nine months, the new business strategy resulted in an 18pc increase in loan volumes as well as increased non-asset based customer-related revenues.

Fee and commission income at $45.7m was 12pc up on the prior year and comprised more than one-fifth of total income.

Foreign exchange income was $15.2m compared with $20m in the same period last year, which was at an exceptionally high level.

For the nine months this year, it entirely comprised revenue derived from customer-related activities, and in particular revenues derived from structured products designed to assist customers in hedging their foreign exchange exposures in the current volatile markets.

Trading income at $6.6m was $4.8m lower than in the prior year period. It comprised revaluation gains on investments in funds managed by the bank's London-based subsidiary, GIB (UK).

The year-on-year decrease was due to a more subdued market environment this year.

Other income for the nine months was $24m versus $12.5m last time.

However, other income included an exceptional, one off $15m recovery arising on the liquidation of a structured investment vehicle that was written off during the financial crisis in 2007.

The remaining other income principally comprised dividends on equity investments.

Total expenses at $106.4m for the nine months were $10.7m or 11pc up on the prior year period.

The year-on-year increase in expenses was attributable to ongoing investment in the implementation of GIB's new GCC-focused universal banking strategy. Consolidated total assets at the quarter end were $20.6 billion, 16pc higher than the last year's end level.

Asset profile as on September 30 reflected a high level of liquidity. Cash and other liquid assets, and short-term placements totalled $8bn, representing an exceptionally high 39pc of total assets.

Investment securities as on September 30, which principally comprised highly rated and liquid debt securities issued by major financial institutions and regional government-related entities, amounted to $3.7bn.

Loans and advances amounted to $8.4bn, which was $1.3bn higher than at last year-end, reflecting ongoing growth in lending activities.

There was a further improvement in the bank's funding profile in the first nine months with a $3.3bn increase in customer deposits.

The Basel II total and tier 1 capital adequacy ratios at the end of the quarter were 18.3pc and 15.6pc respectively.

"The recent upgrades in GIB's ratings reflect confidence in the operating strategy and actions taken to implement a diversified business model, as well as improvements in fundamental financial strength and risk profile," GIB chairman Jammaz Al Suhaimi said.

GIB is owned by the six GCC governments, with the Public Investment Fund of Saudi Arabia holding a majority stake (97.2pc).

©  Gulf Daily News