Year-on-year increases were recorded in all income categories with the exception of a small decrease in other income. Net interest income at $108.8 million for the nine months was three per cent up on the prior year period. During the third quarter, loans and advances, the principal source of the Bank’s net interest earnings, increased by $411 million or six per cent. The growth in the loan portfolio reflected the leveraging of GIB’s expertise to serve the Bank’s large and mid-cap customers. Fee and commission income at $40.7 million was $3.7 million or 10 per cent higher than in the prior year period. As a result, fee-based income comprised more than one fifth of total income, reflecting the successful implementation of GIB’s new strategic focus on non-asset based, relationship-orientated services and on supporting customers’ commercial and trade finance requirements. In particular, a 27 per cent year-on-year increase was recorded in commissions on letters of credit and guarantee. Foreign exchange income at $20.0 million was $11.6 million up on, or almost two and a half times, the prior year level. Foreign exchange income principally comprised profits generated on customer-initiated foreign exchange contracts. The substantial year-on-year increase reflected a focus on the cross selling of treasury products to clients and the introduction of new products and services to meet client needs. Trading income at $11.4 million for the nine months was $5.2 million or 84 per cent up on the prior year period. This was attributable to profits on investments in emerging market debt. Other income of $12.5 million was marginally below the prior year. Other income principally comprised dividends on equity investments, profits realised on the sale of investment securities, and recoveries of impaired loans. Total expenses at $95.7 million for the nine months were 14 per cent up on the prior year period. The year-on-year increase in expenses reflected ongoing investment in the implementation of GIB’s new GCC-focused universal banking strategy. A net provision release of $2.0 million was recorded in the first nine months of the year. The absence of any net provisioning requirement reflected prudent and conservative provisioning actions taken in prior years.
“We are pleased to report continued ongoing profitability in the first nine months of 2012 despite the impact of the initiatives we took in the past couple of years to de-risk the wholesale lending portfolio and improve the funding profile of the Bank, while at the same time investing in the future of the Bank through new strategic initiatives. These initiatives have contributed to the improvement in the profitability of the Bank in 2012 and will support profitability growth in the future as the new GCC-focused universal bank strategy is implemented,” Jammaz Al-Suhaimi, GIB’s Chairman, said.
Consolidated total assets at the quarter end were $17.9 billion, being $1.2 billion or 7 per cent higher than the 2011 year end level. The asset profile at 30th September 2012 reflected an exceptionally high level of liquidity. Cash and other liquid assets, and short term placements totalled $7.3 billion, representing a very high 41 per cent of total assets. Investment securities at 30th September, which principally comprised highly rated and liquid debt securities issued by major financial institutions and regional government-related entities, amounted to $3.4 billion. The Bank had no direct exposure to troubled European government debt impacted by the Eurozone crisis. Loans and advances amounted to $6.8 billion, being slightly higher than at the 2011 year end level. There was a further improvement in the Bank’s funding profile during 2012 with a $1.1 billion increase in customer deposits and a $1 billion increase in bank deposits. GIB’s robust funding position reflects the confidence of the Bank’s customers and counterparties based on its strong ownership and financial strength. The Basel 2 total and tier 1 capital adequacy ratios at the quarter end were an exceptionally strong 20.6 per cent and 17.0 per cent respectively.
Gulf International Bank (GIB) is a leading bank in the Middle East with its principal focus on the Gulf Cooperation Council (GCC) states.