GIB's profits hold in difficult year

14 March 2003
Bahrain-based Gulf International Bank (GIB)has reported net profits of $85.3 million for 2002, a 15 per cent decline on the previous year. Given the adverse market conditions, the performance is impressive and the altered shape of the bank's revenue mix suggests that the strategic repositioning of the bank is beginning to bear fruit.

'The bank has demonstrated its new merchant banking potential,' said GIB chairman Ebrahim al-Khalifa in a statement. 'Higher investment banking and management fees have contributed solidly.' GIB has been aggressively developing both its London-based asset management operation and its dedicated structured finance activities in the Gulf (Asset Management, MEED Special Report, 14:2:03, page 29).

Net interest income was flat year-on-year, but other income expanded by 26 per cent to $88.4 million. In addition, the bottom line was supported by moves to strengthen the quality of the bank's loan book: $500,000 was written back during 2002. However, a 19 per cent increase in provisions for securities to $83.2 million had a sharp impact on net profits.

GIB's balance remains robust with a Bank for International Settlements (BIS) capital adequacy ratio at the end of 2002 of 12.8 per cent.

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