The Kuwait-based Gulf Investment Corporation (GIC) has announced record consolidated profits of $128.5 million for 1993, a 59 per cent increase. The figures show a substantial recovery for GIC itself, independent of its wholly owned Bahrain subsidiary Gulf International Bank (GIB – see below). Net income was $80 million in both 1991 and 1992 (MEED 5:3:93).
A significant part of the improvement is due to the $88.2 million net profit from GIB, whose results were announced in conjunction with its parent. However, GIC says that net income, before the inclusion of GIB, was $40.3 million in 1993, an increase of 235 per cent. The full financial details will be released during GIC’s general assembly in February.
GIC says its net consolidated profit represents a 17.1 per cent return on paid-up capital. Its revenues benefited from declining interest rates and the effective management of securities portfolios. Total assets increased by 13 per cent to $8,555 million at the end of 1993.
‘Our results for this year are exceptionally good,’ GIC executive vice- president Hisham Razzuqi says. ‘An excellent performance from the capital and equity markets business contributed to the good results.’ This included gains from GIC’s Far East portfolio and also from European equity and bonds.
GIC also expanded its business in investment banking and financial advisory services, which generated good fee incomes in 1993, Razzuqi says. GIC undertook several financial advisory operations in 1993. These include privatisation schemes in Kuwait, advisory services to Gulf Petrochemical Industries Company (GPIC) in Bahrain, as well as projects in Saudi Arabia and other Gulf countries.
Razzuqi says he is optimistic about the prospects for the region, despite falling oil prices. He predicts that lower government spending will give rise to a greater need for private lending, increasing the role of organisations such as GIC. Razzuqi says GIC will continue with its current strategy in 1994, which includes an increased focus on capital markets. In addition, he predicts that the growing trend towards privatisation in the region will create more opportunities for GIC, which could play a role on both the financing and advisory side.