The London-based ABC International Bank (ABCIB) reported a 21 per cent increase in post-tax profits for 1993 to £6.2 million ($9.3 million), all of which was retained. The bank has also appointed Stanislas Yassukovich deputy chairman and executive director as part of a restructuring of the bank’s management and balance sheet begun in 1993 (MEED 18:6:93).
The most significant balance sheet changes are lower customer deposits and higher longer term funding. Customer deposits fell by 54.5 per cent to £62.9 million ($94 million). They were £184 million ($275 million) in the second half of 1991 (MEED 12:2:93).
During the year, the bank increased long-term funding to 31 per cent from 5 per cent in 1992. It raised a $68 million, 10-year subordinated loan from its parent, the Manama-based Arab Banking Corporation (ABC). ABCIB also raised $100 million through a syndicated five-year loan, $75 million from a five-year private placement of certificates of deposit and £130 million ($194 million) in the form of a seven-year term borrowing.
The improvement in profits reflects the increased emphasis on trade finance and treasury activities. The increase came from fees and commissions, other income and dealing profits, plus a reduction in provisions for bad debts. Dealing profits rose by 220 per cent to £2.4 million ($3.5 million). Net interest income fell by 14.3 per cent to £9.6 million ($14 million).
Provisions, due to exposures inherited when ABCIB took over the loan portfolio of ABC’s London branch, continue to be a drain, although in 1993 they were cut by 29.5 per cent to £5 million ($7.5 million – MEED 12:2:93). Total assets and loans and advances were relatively unchanged.
The appointment of Yassukovich provides a permanent, London-based deputy for Manama-based chairman Abdulla A Saudi, the group president and chief executive. Yassukovich, a well-known figure in London banking circles, has held several senior international banking posts and has been a non- executive director of ABCIB since 1991. He is the vice-chairman of Cragnotti & Partners (Capital Investment) and was formerly chairman of Merrill Lynch Europe and the Middle East, deputy chairman of the London stock exchange and chairman of the Securities Association.
‘I shall be a bit more involved with the strategic objectives of ABCIB, and will continue to develop the bank’s presence in Europe and build existing operations,’ Yassukovich says. ‘ABCIB is a key subsidiary of the ABC group. It is a long-term ambition to consolidate western hemisphere branches into ABCIB’s network, particularly those in the EU, but that takes time due to the fiscal and regulatory matters.’
The Paris operation was incorporated into ABCIB in 1991. ABC’s Milan branch is likely to be the next candidate. Other European subsidiaries are in Spain, Germany and Monaco.
Yassukovich says trade finance will remain ABCIB’s core business, particularly between the Gulf and Europe. Other activities include private banking and funds. The bank set up a private banking branch in Mayfair in 1992. In January, ABCIB established an offshore closed-end fund to invest in the UK property market (MEED 4:2:94).