Bahrain-based International Investment Bank (IIB) has reported the net income of $9.6 million (BD3.61 million) in the first half of this year, as compared to $5.4 million during the same period last year.

Total Income increased by 120.4 per cent to $18.7 million in the first half of 2007, mainly from investment banking fees that increased by $8.5 million or 114.5 per cent to $15.9 million, generated from the structuring, underwriting and placement of new investments.

The bank also registered a gain on sale of investment property in the Seef district of Bahrain of $1.4 million. Total Expenses increased by $5.9 million, as IIB continued to build up its staff and operating infrastructure to support its growing business activities.

Reflecting lower commodity murabaha receivables and payables with financial institutions, total assets reduced by 7.2 per cent from the 2006 year end to $87.7 million. The first half profitability ratios were strong, evidenced by an annualised return on paid-up capital and average equity of 44.8 per cent and 30.1 per cent respectively and on average assets of 21.2 per cent, while the capital adequacy ratio of 58 per cent is almost five times greater than the minimum requirement of the Central Bank of Bahrain.

"IIB has again achieved a significant improvement in its financial performance, based on its ongoing strategy of investing across diverse asset classes and geographic regions, with excellent returns for the Bank's shareholders and investors. During the first half of 2007, the bank has concluded investment transactions ranging from a manufacturing project in Bahrain, a fully-tenanted commercial building in Europe and real estate development projects in Saudi Arabia and the UAE,” said said IIB chairman Saeed Abdul Jalil Mohammed Al Fahim.

“The pipeline of deals under preparation continues to be strong and accordingly the outlook for further growth in earnings in 2007 and beyond looks very positive. Based on rigorous due diligence and efficient execution, IIB has been able to deliver ever stronger results and to meet the expectations of our investors and shareholders in what is a highly competitive environment," he added.

“During the first half of 2007, IIB acquired on behalf of its investors a 35 per cent stake in a US$37 million Bahrain-based steel reinforcement bar manufacturer. Exit from the investment is intended to be within five years and an internal rate of return (IRR) in excess of 23 per cent p.a. is targeted by IIB. Steel reinforcement bars (“rebars”) are an important component in construction projects and generally represent around 15 per cent of total construction costs. Unirol is constructing an industrial facility which will be the first steel rolling mill in Bahrain,” said the bank’s chief executive officer Aabed Al-Zeera.

“The bank has also recently acquired a high-quality portfolio of commercial real estate properties in Munich, Germany, valued at $210 million. IIB owns a 95 per cent stake in this portfolio, comprising three commercial properties which are rented to “Siemens Corporation” (a blue chip German company) and strategically located in Munich. The Bank and its co-investors can effectively leverage continued growth and strong demand for office space in the German commercial property sector. The projected IRR on the investment is in excess of 10.1 per cent p.a. over an investment horizon of five years, with a cash yield of 7 per cent per annum payable on a quarterly basis,” he said.

“The German investment, which marks IIB’s fourth European investment in total, and its third real estate acquisition in Europe, is aimed at providing the bank’s GCC-based investors with access to the buoyant German commercial property market, which continues to expand at a rapid rate and is expected to deliver opportunities for both healthy returns as well as diversification”, said the CEO.

IIB has recently partnered wi