A sharp rise in fees and gains from sales of investments earned Bahrain International Bank (BIB) a 16 per cent rise in 1996 net profits to $21.7 million. The Manama-based investment bank is considering buying more companies in the US and Europe this year and expects to launch two new investment funds.
BIB says it did well last year in all its core businesses: direct investments (mainly in the US), corporate finance in the Gulf, securities holdings and real estate in Europe. Total assets rose to $640.8 million in 1996 from $599.6 million in 1995. Provisions were increased to $7.4 million from $1 million. BIB’s chief executive, Robin McIlvenny, says about half of this reflects provisions against two long-standing investments, one in the US and one in the UK, which are now almost completely covered.
Customer deposits rose to $45.7 million from $28.3 million during last year. McIlvenny says the bank is now satisfied with the maturity of its funding following floating rate note issues in recent years, though it could go back to the debt markets to finance any corporate acquisitions in 1997.
BIB cut its investment securities portfolio by about $70 million to $246.4 million. Most of this was sold off during the last quarter of the year after the appointment of David Jansen, formerly of United Bank of Kuwait, as BIB’s new head of investment securities. The bank now intends to start building up the portfolio again. The bank doubled
the size of its other investments in mid-year with the $86.5 million acquisition of Carrolls Holding Corporation, a burger restaurant operator in the US. It made $15.9 million from selling investments – notably through the flotation of a US clothing distributor
– compared to $10.2 million in 1995.
‘Going forward, the focus is going to be on acquiring companies in the US and Europe,’ McIlvenny says, adding that the target range would be companies worth
$50 million-200 million. The bank is looking at increasing its interest income by going into mezzanine finance deals.
BIB plans to expand its investment management business by adding two new funds to its existing Gulf index funds. Both will aim at industrial sectors rather than countries: McIlvenny says one will invest within the GCC. The bank also wants to capitalise on the success of last year’s public offering of Oman’s Renaissance Services, which it advised on and underwrote, by seeking out similar corporate finance mandates in the Gulf. BIB has had offers in the past for Nico Middle East, the oilfield services company it owns in the UAE, and may opt to sell or float it this year.