ABC International Bank’s net profits inched upwards in 1995 to £7.6 million ($11.45 million), with a fall in net interest income offset by a combination of lower provisions and higher fee-based income during the year.
The bank, a London-based subsidiary of Arab Banking Corporation (ABC), specialises in financing trade between the Arab world and Europe. Its net interest income fell 29.8 per cent in 1995 to £14.6 million ($22.0 million). Fee income rose 10 per cent to £8.8 million ($13.3 million), while dealing operations moved into the black with a profit of £0.5 million ($0.75 million) compared with a small loss in 1994. Provisions stood at £3.7 million ($5.6 million) compared with £9.5 million ($14.3 million) the previous year.
Total assets grew by 7.7 per cent to £1,270 million ($1,913 million). ‘During 1995, the bank continued to expand its activities in trade finance, but generally confined its new lending to transactions which offer long-term relationship benefits,’ chairman Khalid al-Turki says.. He noted that 31 per cent of total funding was covered by long-term borrowing. while loans repayable in two years or less account for more than half the bank’s portfolio. Shareholders’ equity stood at £179.6 million ($270.5 million).
‘The volume of letters of credit, acceptances and guarantees transacted rose by 81 per cent in 1995 to total £1,373 million,’ the bank says. ‘Greater portfolio diversification was achieved, both in geographical and product terms.’ The bank says it re-entered the syndicated loan market in late 1995 and expects syndications, particularly in the Arab world, to form an increasing source of business. It has increased marketing in Asia, Africa and Latin America, ‘which have the potential to become important sources of business.’