Faysal Islamic Bank of Bahrain (FIBB) has streamlined its board of directors as it prepares for the expansion of its international operations. First-quarter financial results have also been published which show the first signs of a return to past levels of profitability after a difficult year in 1998.

At the bank's annual general assembly, held in Bahrain on 22 May, a new board of directors was elected, largely as a result of a review of corporate governance conducted in the latter months of 1998 and early 1999. Seven of the board members have resigned: Abdullah Ahmed Alireza (who had been one of two deputy chairmen), Abdulla Othman al-Hussain, Amr Mohamed al- Faisal al-Saud, Ebrahim Khalifa al-Khalifa, Hyder Mohamed Binladin, Imtiaz Ahmad Pervez and Mohamed Abdullah el-Kheiji.

The only new face on the board of directors is Khalid Janahi. A bank official says that the reduction in the size of the board is expected to improve efficiency and that most of the directors who have retired have seats on the board of Dar al-Maal al-Islami Trust (DMI). DMI was a founding shareholder of FIBB and currently controls 53 per cent of its shares, therefore duplication of responsibilities has been avoided.

The bank also has plans to continue the expansion of its network, says FIBB spokesman Mansur Mannan. Its operation in Bangladesh, which opened in late 1997, is to open a second branch in the last quarter of 1999. FIBB is to expand its presence in Yemen, with a new branch scheduled to open on 1 July. In Bahrain, a third branch will be added at some point in the second half of the year. 'These developments are broadly in line with the bank's plans to focus on its operations in the Middle East,' says Mannan.

Other plans for the coming months include the launch of a new $100 million investment fund in conjunction with an as yet unnamed US financial institution.

FIBB had a difficult year in 1998, largely due to the losses incurred by its subsidiary in Pakistan, Faysal Bank, which was badly hit by the devaluation of the rupee and the imposition of sanctions after nuclear tests. The group's level of provisioning was doubled to $22 million and net profits fell by 75 per cent to $4 million.

For the first quarter of 1999, the bank reported net profits of $2.5 million. Says Mannan: 'We are expecting a return to something close to normal levels of profitability in 1999.'