'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.