Profits rose by 55 per cent at the Bahrain-based TAIB Bank in 1994 to reach $9.6 million as the bank concentrated on fee-based income and diversifying its investment portfolio including the launch of a $50 million Indian fund.

'The 1994 results are a clear reflection of the bank's continuing successful strategy these past three years to shift away from a dependence on interest and lending-related income,' Iqbal Mamdani, the vice-chairman, said in a statement. 'By focusing on fee-based business we have maintained risk reduction while improving profitability.'

Income from foreign exchange dealings on behalf of clients was a major contributor to fee income, as investors sought to capitalise on currency fluctuations during the year. The bank also sold two properties in the UK during the year.

The bank's assets fell by 12 per cent in 1994 to $313 million, mainly due to a 25 per cent drop in the value of the trading securities portfolio to $89 million and a 35 per cent drop in interbank lending to $46 million. However, investments rose by 40 per cent to $60 million. TAIB's plans to diversify its investment portfolio and develop its fund management activities, include focusing on opportunities in the Indian subcontinent. A $50 million India fund is planned to be launched after Ramadan, and will target Gulf investors and non-resident Indians in the Gulf.

TAIB has three subsidiaries in Istanbul, London and New York.