GIB signs $1.2b loan

DUBAI — Bahrain-based Gulf International Bank (GIB), owned by the six GCC governments, yesterday announced the signing of a new syndicated term loan facility for $1.2 billion, claimed to be one of the largest loans arranged for a Middle Eastern bank.

By A Staff Reporter

Published: Sat 12 May 2007, 9:04 AM

Last updated: Sat 4 Apr 2015, 11:00 PM

The facility was launched into syndication on April 2, 2007 for an amount of $1 billion. "The facility was extremely well received by the market and was oversubscribed to an amount of $1.46 billion," the bank said.

Dr Khaled M. Al Fayez, GIB's Chief Executive Officer, said in London that the loan was probably one of the largest loans arranged for a Middle Eastern bank and reflects the confidence in GIB's strength and sound business strategy.

"We are pleased with the support we received from the international banking community."

GIB, one of the largest regional banks in the GCC, with more than $26.2 billion of its own assets and $22 billion of clients' assets under management, is majority-owned by the six GCC governments with a 72.5 per cent stake, while the Saudi Arabian Monetary Agency owns 27.5 per cent.

Dr Al Fayez said the facility was fully-underwritten and arranged by Initial Mandated Lead Arrangers including ABN Amro Bank N.V., Arab Bank plc, The Bank of Tokyo-Mitsubishi UFJ, Ltd., Barclays Capital (the investment banking division of Barclays Bank PLC), Bayerische Landesbank, BNP Paribas, CALYON, Commerzbank Aktiengesellschaft, Mizuho Corporate Bank, Ltd., The Royal Bank of Scotland plc, Standard Chartered Bank, Sumitomo Mitsui Banking Corporation Europe Limited.

"GIB's GCC-focused merchant banking strategy, which was adopted in 2002, has resulted in a significant improvement in the diversification and quality of its revenues and a substantial increase in net income and return on equity (ROE). Over the last four years, GIB has more than doubled its ROE, which rose to 14.3 per cent in 2006. The loan will be used to finance the Bank's various activities," he said.

In March this year, GIB increased its paid-up capital by $500 million to $1.5 billion, representing 50 per cent of the bank’s authorised capital of $3 billion. Following the increase in capital and the payment of a 50 per cent dividend in respect of 2006 profits, GIB’s total equity will increase to over $ 2.2 billion.

The increase in GIB’s paid-up capital was approved by the bank’s shareholders at an Extraordinary General Assembly meeting in February. The capital increase has been subscribed by the Bank’s shareholders in the same proportion as their current shareholdings. Accordingly, there is no change in the ownership structure of the Bank.

“The capital increase will enable GIB to continue to expand its operations in its core market in the GCC and to strengthen its leading position in the region. The capital increase will also play a constructive role in helping to maintain and enhance the bank’s credit ratings," said DrAl Fayez.

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