Gulf International Bank net up to $9.8m

Gulf International Bank (GIB) has posted net profit of $9.8 million in the second quarter compared to a loss of $37.9 million in the same period last year.

The net interest income increased by 11 percent to $60 million. Fees and commission income have risen 20 percent to $16.2 million, operating expenses have decreased 3 percent, and trading income has reached $10.3 million as a result of favorable market conditions. 

The second quarter provision charge was $12.1 million, compared to a $49.6 million in the second quarter of 2020.

The basic and diluted earnings per share amounted to US0.39 cents during the second quarter of 2021, compared to a loss of US1.52 cents in the same period last year. 

Total comprehensive income attributable to the shareholders of the bank during the quarter amounted to $14.3 million, compared to a loss of $47.5 million reported for the same period last year driven by strong performance and positive revaluation gains.

For the first half of 2021, GIB reported a net profit of $17.7million attributable to the shareholders of the bank compared to a loss of $85.4 million in the prior year period. 

This was achieved by a growth of 27 percent in revenues and a 3 percent decrease in expenses reflecting the continued success in implementing the Bank’s strategic transformation plan. The Group’s net income for the half year ended 30th June 2021 reached $28.5 million compared to a loss of $102.1million  for the same period last year.

On the revenue side, the bank achieved a year-on-year increase of $39.5 million in non-interest income and slight drop in net interest income impacted by post-pandemic market conditions. 

Fee and commission income of $33.3 million was 25 percent up on the previous year, reflecting success of the bank’s strategic revenue diversification initiatives led by higher fees from asset management, corporate advisory, trade-related and global transaction-banking. 

Foreign exchange income of $10.1 million was slightly lower than the prior year period. Trading income of $20.1 million was significantly up as compared to the loss recorded in 2020, and largely comprised of a strong market rebound on portfolios managed by the bank’s Saudi-Arabian based subsidiary (GIB Capital) and the London-based subsidiary (GIB UK).

Total expenses of $129.7 million for the six months were 3% lower than the prior year period due to continued focus on cost optimisation and operational efficiencies.

The provision charge for the first half was $21.9 million, compared to a $115.3 million in the first half of 2020, a year in which the bank prudently increased the provisions given elevated risk triggered by the pandemic and its impact on the legacy portfolio.

Basic and diluted earnings per share attributable to the shareholders of the bank reached US0.71 cents compared to a loss of US3.42 cents per share in the prior period. Total comprehensive income attributable to the Shareholders of the Bank reached $37.6 million compared to a $105.8 million loss in the prior year period, driven by a strong performance and market rebound.

Total shareholders’ equity excluding minority interest increased by 2 percent during the period to reach $2.1 billion (Dec-20: $2.1billion) and include accumulated losses of $805.1 million that represent 32% of capital and reserves of $423.3 million which represent 17% of capital.

Consolidated total assets at the quarter end were $29.9 billion up by 1 percent from December 2020 level of $29.6 billion. Cash and other liquid assets including short-term placements reached $13.7 billion, representing a high level of liquidity and 46 percent of total assets. Investment securities of $4.4 billion principally comprised highly rated and liquid debt securities issued by major financial institutions and regional government related. Loans and advances increase by 4 percent during the year to reach $10.9 billion.

The bank’s funding profile remained robust in the first half of 2021 with customer deposits of $19.8 billion comprising the majority of total deposits. GIB’s strong  funding position demonstrates the confidence of the bank’s customers and counterparties based on its strong ownership and financial strength. The bank’s liquidity coverage ratio of 161.2 percent and net stable funding ratio of 156.1 percent are both significantly above regulatory limits. The Basel 3 total capital adequacy ratio at the quarter end was strong at 16.6 percent.

GIB’s Outlook has recently been revised by Fitch Ratings to Stable from Negative, while affirming the Long-Term Issuer Default Rating (IDR) at ‘BBB+’ and Viability Rating (VR) at ‘bb+’.

The financial statements for the first half of 2021 were reviewed by the external auditors Ernst & Young (EY) and comply with International Accounting Standard (IAS) 34 as modified by the CBB.

Gulf International Bank B.S.C. is a pan GCC universal bank established in 1975 and regulated by the Central Bank of Bahrain. GIB’s services are delivered across the GCC and international markets through its subsidiaries: GIB Saudi Arabia, GIB (UK) Ltd. Additionally, the bank has branches in London, New York, and Abu Dhabi, in addition to a representative office in Dubai.

GIB is owned by the governments of the Gulf Cooperation Council countries, with Saudi Arabia’s Public Investment Fund being the main shareholder.