Gulf International Bank B.S.C announces a 5.6 per cent increase in full year profit to $90.4 million
GIB recorded consolidated net income after tax of US$90.4 million for the year ended 31st December 2015, compared to US$85.6 million in the prior year, representing a 5.6 per cent year-on-year increase. Total income at US$308.0 million was US$50.4 million or 19.6 per cent up on 2014, with increases recorded in all income categories. The growth in total income more than offset an increase in total expenses of US$27.2 million largely associated with GIB’s innovative retail bank and new core banking and treasury IT systems implemented during 2015, resulting in an improvement in net income before provisions and tax of US$23.2 million or 25.0 per cent. Net income after tax in the fourth quarter was $25.7 million compared to $12.9 million in the fourth quarter of 2014.
Net interest income at US$188.2 million for 2015 was US$30.2 million or 19.1 per cent up on the previous year. This growth principally reflected increases in both the loan volume and loan margins, as the Bank continues to successfully re-orientate its lending activities from transactional-based long-term project and structured finance to relationship-based large and mid-cap corporates. Fee and commission income at US$70.2 million was US$7.3 million or 11.6 per cent up on 2014, and comprised 22.8 per cent of total income. This underlined the success of GIB’s strategic focus on relationship-orientated products and services, and enhancement of fee income.
Foreign exchange income at US$19.8 million was US$0.4 million or 2.1 per cent up on 2014. This primarily comprised revenue from customer-related activities, and in particular, revenues derived from bespoke structured products designed to assist customers in hedging their foreign exchange exposures in volatile markets. Trading income at US$6.2 million improved by US$3.8 million over the previous year. Trading income principally comprised gains on an investment in a fund managed by the Bank’s London-based subsidiary, GIB (UK) Limited, and customer-related interest rate derivative income. Other income at US$23.6 million was US$ 8.7 million or 58.4 per cent up on 2014. Other income for 2015 consisted largely of dividends on equity investments, and asset recoveries.
Total expenses at US$192.1 million for the year were US$27.2 million or 16.5 per cent up on 2014. The increase was attributable to the ongoing investment in GIB’s new retail banking proposition, and the new core banking and treasury systems which were implemented in the middle of 2015. A loan provision charge of US$21.3 million was made in 2015 compared with US$10.3 million in the previous year.
Consolidated total assets at the end of 2015 stood at US$24.2 billion, being US$2.9 billion or 13.6 per cent higher than at the end of the previous year. The asset profile reflected a high level of liquidity. Cash and other liquid assets, and short-term placements, totalled US$10.5 billion and represented an exceptionally high 43.6 per cent of total assets. Investment securities, which principally comprised highly-rated and liquid debt securities issued by major financial institutions and regional government-related entities, amounted to US$3.9 billion. Loans and advances grew to US$9.2 billion, being US$1.2 billion or 15.5 per cent higher than 2014, reflecting new relationship-based large and mid-cap corporate loans. Shareholders’ equity at the end of 2015 stood at US$2.43 billion compared with US$2.35 billion at the end of the previous year.
There was a further improvement in the Bank’s funding profile during 2015, with a US$1.8 billion or 13.8 per cent increase in customer deposits, which accounted for 88.1 per cent of total deposits. Securities sold under agreements to repurchase (repos) increased by US$1.5 billion to US$2.1 billion. This reflected a strategic initiative to fund a higher proportion of the investment security portfolio through repos in order to minimise the related funding costs. A US$1.0 billion decrease in senior term financing was due to the maturity of a Saudi Riyal denominated bond issue in the second quarter of the year. GIB’s robust funding position demonstrates the confidence of the Bank’s customers and counterparties based on its strong ownership and financial strength. The Basel 3 total and tier 1 capital adequacy ratios at the end of 2015 were an exceptionally strong 17.8 per cent and 16.8 per cent, respectively.
GIB’s Chairman H.E. Jammaz bin Abdullah Al-Suhaimi, commented “I am pleased to report that we made excellent progress during the year in implementing our business strategy to transform GIB into a leading pan-GCC universal bank providing innovative customer-centric solutions.”
H.E. Al-Suhaimi continued “Key strategic highlights of 2015 included the official launch of GIB’s unique technology-based retail bank in Saudi Arabia under the brand name Meem by GIB (meemم), which marked the beginning of a new chapter in the Bank’s strategic evolution. In addition, a new wholesale banking branch in Abu Dhabi was inaugurated, strengthening GIB’s ambition to be the leading pan-GCC bank with strong regional expertise. GIB has had a representative office in Abu Dhabi since 1990, and the Emirate has played a pivotal role in the Bank’s growth and evolution. Our operations in the UAE are further enhanced by the Dubai representative office, which was opened in 2014.”
Mr. Abdulaziz A. Al-Helaissi, GIB’s Chief Executive Officer stated “Our strong business achievements during 2015 continued to support the implementation of the Bank’s strategy. The development of new wholesale banking and treasury relationships, has enabled GIB to grow its loan portfolio; increase non asset-based, client-related revenues; boost fee and commission income through better cross-selling; and enhance its funding profile by attracting deposits from new customers. Additionally, the Bank’s Sharia-compliant banking business witnessed another active year. GIB Capital led a number of high-profile investment banking deals in 2015, with a particular focus on debt capital markets and debt advisory mandates. The Bank’s asset management business, which is managed by GIB (UK) Limited, also performed well, with the fixed income business being the driver of improved revenue performance.”