GULF INTERNATIONAL BANK ACHIEVES 30% INCREASE IN NET PROFIT FOR THE NINE-MONTH PERIOD ENDED 30TH SEPTEMBER 2022

For the third quarter of 2022, GIB reported a net profit attributable to the Shareholders of the Bank amounting to $11.6 million compared to $21.2 million reported in the same quarter last year, representing a drop of 45%. Despite a very healthy increase in core revenue categories, the decrease is mainly attributable to unrealised mark-to-market losses on the Bank’s trading portfolio amounting to $7.8 million of losses, and a 65% decrease in other income to $5.7 million largely due to lower recoveries on previously written off assets in comparison to sizeable recoveries last year. The increase in core revenue categories included a 151% increase in foreign exchange income to $12.8 million, a 42% growth in net interest income to $91.1 million driven by rising interest rates and increasing yields, and a 33% increase in net fee and commission income to $20.5 million mainly relating to loan distribution and underwriting fees in line with diversification initiatives. The third quarter included a $13.3 million provision charge for expected credit losses, compared to a provision charge of $14.2 million in the same quarter last year. 

The basic and diluted earnings per share attributable to the Shareholders of the Bank amounted to US0.46 cents per share for the third quarter of 2022, compared to US0.85 cents per share for the same quarter last year. Total comprehensive income attributable to the Shareholders of the Bank for the quarter amounted to $13.1 million, compared to $24.1 million reported for the same quarter last year, down by 46%.

For the period ended 30th September 2022, GIB achieved a remarkable increase of 30% in net profit attributable to the Shareholders of the Bank reaching $50.7 million compared to $38.9 million in the same period last year. The Group’s net income for the period ended 30th September 2022 of $65.2 million compared to $52.5 million for the same period last year, representing an increase of 24%.

Net interest income of $235.7 million was 31% higher than prior year, due to higher balance sheet spreads resulting from the rising interest rates environment and enhanced lending margins. Net fee and commission income of $76.2 million was 56% up on the previous year, reflecting the successful execution of diversifying away from pure lending activities. Foreign exchange income of $25.1 million almost doubled from prior year period. Unrealised trading losses of $11.7 million were recorded for the period in comparison to trading gains of $31.2 million reported for the same period last year, primarily caused by fair-value market movements in funds managed by the Bank’s Saudi-Arabian and London based subsidiaries, GIB Capital and GIB UK respectively.

Total operating expenses of $243.3 million for the nine months were 22% higher than the prior year period to support planned business-driven growth and value-driven propositions.

The $22.2 million provision charge for expected credit losses for the period compared to $36.1 million in the same period last year. This reflects the Bank’s proactive and prudent management of risk which has resulted in a marked increase in the provision coverage ratio. 

Basic and diluted earnings per share attributable to the Shareholders of the Bank amounted to US2.03 cents per share compared to US1.56 cents per share for the prior period. Total comprehensive income attributable to the Shareholders of the Bank of $63.3 million compared to $61.7 million for the same period last year, representing an increase of 3%.

Total shareholders’ equity excluding minority interest increased by 3% during the period to $2.2 billion compared to $2.1 billion at 31st December 2021 and included accumulated losses of $741.2 million that represent 25% of share capital ($2.5 billion) and reserves ($449.9 million).

Consolidated total assets at the quarter end stood at $35.9 billion up by 13% from 31st December 2021 which stood at $31.8 billion. Cash and other liquid assets including short-term placements of $17.6 billion represented continued strong levels of liquidity, and accounted for 49% of total assets. Investment securities of $5.7 billion principally comprised high-rated and liquid debt securities issued by major financial institutions and regional government-related entities. Loans and advances decreased by 8% during the period to $10.7 billion, reflecting strategic and targeted acquisition and reduction in low margin transactions, coupled with selective underwriting. 

The Bank’s funding profile remained robust in the period ended 30th September 2022 with customer deposits of $25.6 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 162.4% and net stable funding ratio of 160.8% are both significantly above regulatory limits reflecting Bank’s strong liquidity and capacity for growth. The Basel 3 total capital adequacy ratio at the quarter end was strong at 17.6%. 

The financial statements for the period ended 30th September 2022 were reviewed by the external auditors Ernst & Young (EY) and comply with International Accounting Standard (IAS) 34 - Interim Financial Reporting.