GIB posts net profit of $9.8m

Gulf International Bank has announces its 2021 semi-annual financial results including the second quarter, with net profit attributable to the shareholders of the bank reaching $9.8 million, compared to a loss of $37.9 million in the same period last year.

This increase is attributable to a 11 per cent growth in net interest income reaching $60 million, a 20 per cent increase in fees and commission income to $16.2 million, a reduction of three per cent in operating expenses and a notable increase in trading income to reach $10.3 million driven by favourable market conditions. The second quarter provision charge was $12.1 million, compared to a $49.6 million in the second quarter of 2020.

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 $17.7 million 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 per cent in revenues and a three per cent decrease in expenses reflecting the continued success in implementing bank’s strategic transformation plan. The group’s net income for the half year ended June 30, 2021 reached $28.5 million compared to a loss of $102.1 million for 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 per cent 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.

Total shareholders’ equity excluding minority interest increased by two per cent during the period to reach $2.1 billion and include accumulated losses of $805.1 million that represent 32 per cent of capital and reserves of $423.3 million which represent 17 per cent of capital.

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.

business@khaleejtimes.com