Growth in interest and fee income and treasury and capital markets activities helped boost net profits at the London-based Saudi International Bank (SIB) to £22.2 million ($33.74 million) in 1995. This was up from a 1994 profit from normal operating activities of £18.3 million ($27.82 million).
The 1994 figure does not include a one-off gain of £24 million ($36.48 million) from the sale of SIB’s 20 per cent stake in United Saudi Commercial Bank (USCB).
‘The income generated from our trading activities was maintained at a strong and consistent level,’ SIB executive director Robert McGinn said in a statement. ‘The increasing number of client assignments validated the emphasis we have placed on corporate finance, risk management and fund management services.’ Operating income stood at £61.1 million ($92.4 million) in 1995, compared with £59.3 million ($89.6 million) made in 1994 after subtracting the exceptional gain from the sale of USCB.
The bank’s total assets were little changed at £3,236 million ($4,919 million), compared with £3,231 million ($4,911 million) the previous year. The statement said SIB had total capital resources of £239 million ($363 million) in 1995, without giving a breakdown.
The 1994 figure was £224 million ($341 million). SIB is paying a £7 million ($11 million) dividend for 1995, up £1 million from 1994.
Net interest income rose by £4 million ($6 million) to £38.9 million ($59 million) and profits from treasury and capital markets activities increased by 33 per cent to £10.2 million ($16 million), the bank said.
The bank recovered £2.2 million ($3.3 million) worth of provisions previously made for bad and doubtful debts. It also wrote back to its profit and loss account an unused provision of £5.5 million ($1.52 million), set aside to cover expenses caused by a bomb in central London in 1993, which affected the bank’s premises.
SIB, set up in 1975, is 50 per cent owned by the Saudi Arabian Monetary Authority (SAMA, the central bank). Morgan Guaranty Trust Company of New York owns 20 per cent and the rest is held by two Saudi and five international banks.
The bank intends to focus in 1996 on building up its corporate finance business, an area where executives say it has done a lot of groundwork in recent years. SIB feels it is well-placed to take advantage of opportunities in Saudi Arabia in particular.
Another area of business where SIB has been active is in high-yield managed funds.
Executives say the bank will be looking for opportunities that might enable it to launch new funds in 1996.