Bahrain Middle East Bank (BMB) has reported full-year 1999 earnings of $30.1 million, more than double the $13.7 million recorded in 1998. Net income was driven up by strong investment income growth which improved by 32 per cent to $44.7 million from $33.9 million in the previous year.

BMB's impressive financial performance follows an extraordinary year in 1998, in which losses of $9.9 million recorded by its Kuwait-based trading company had a severe impact on the bottom line. The operation was shut down. Full-year 1999 income is up 20 per cent on the earnings from continuing operations in 1998.

'Three years ago we began our investment in the technology sector, which has today become the growth engine for, and economic leader of, the US economy,' says Albert Kittaneh, BMB's chief executive. 'We are extremely pleased to have afforded our clients the opportunity to capitalise on this trend.' On the back of its success in technology investments, BMB in early January launched a new venture, BMBTechnology & Telecommunications Company (MEED 14:1:00). BMB will take either a 20 per cent or $10 million stake in the new investment company, with the remainder sold to its extensive customer base.

Net interest income also improved in 1999 - up 5 per cent to $8.2 million. The bank says this was primarily the result of the formation of Saar Holdings CDO - a $260 million securitisation - last March (MEED 30:4:99).

The bank's foreign exchange and bond trading departments recorded losses of$5.8 million. The $2.6 million loss of the capital markets division was its first since inception in 1994. The bank says the $3.2 million losses incurred by the foreign exchange unit have led it to rethink its strategy in this area, and new appointments can be expected over the next five months.

Total assets at the end of 1999 fell 11 per cent to $656 million, largely as a result of Global Diversified CBO no longer being a consolidated subsidiary of BMB.

BMB is gearing up for a change of image. 'The bank's new brand and corporate image will be launched in March,' says Kittaneh.