Bahrain-based Gulf International Bank (GIB) said its consolidated net profit for the nine months ended September 30 soared to $97 million, thus registering a 15 per cent (or $12.4 million) growth over the same period last year.

Announcing the results, GIB said its net income after tax in the third quarter was $39 million compared to $22.2 million last year.

The year-on-year increases were recorded in all income categories with the exception of a small decrease in other income. Net interest income reached $108.8 million for the nine months, up 3 per cent over the prior year period.

During the third quarter, loans and advances, the principal source of the bank’s net interest earnings, increased by $411 million or 6 per cent, said the statement from GIB.

The growth in the loan portfolio reflected the leveraging of GIB’s expertise to serve the bank’s large and mid-cap customers. The fee and commission income stood at $40.7 million posting a 10 per cent growth over last year.

As a result, fee-based income comprised more than one fifth of total income, reflecting the successful implementation of GIB’s new strategic focus on non-asset based, relationship-orientated services and on supporting customers’ commercial and trade finance requirements.

Commenting on the performance, chairman Jammaz Al-Suhaimi said: “We are pleased to report continued ongoing profitability in the first nine months despite the impact of the initiatives we took in the past couple of years to derisk the wholesale lending portfolio and improve the funding profile of the bank, while at the same time investing in its future through new strategic initiatives."

"These initiatives have contributed to the improvement in the profitability of the bank in 2012 and will support profitability growth in the future as the new GCC-focused universal bank strategy is implemented," remarked Al-Suhaimi.

According to him, the substantial year-on-year increase reflected a focus on the cross selling of treasury products to clients and the introduction of new products and services to meet client needs.

Trading income at $11.4 million for the nine months grew 84 per cent over the same period last year. This was attributable to profits on investments in emerging market debt. The other income of $12.5 million was marginally below the prior year.

Other income principally comprised dividends on equity investments, profits realised on the sale of investment securities, and recoveries of impaired loans. Total expenses at $95.7 million for the nine months were 14 per cent up on the prior year period.

Consolidated total assets at the quarter end were $17.9 billion, being $1.2 billion or 7 per cent higher than the 2011 year end level. The asset profile at September 30 reflected an exceptionally high level of liquidity.

Cash and other liquid assets, and short term placements totalled $7.3 billion, representing a very high 41 per cent of total assets. Investment securities at 30th September, which principally comprised highly rated and liquid debt securities issued by major financial institutions and regional government-related entities, amounted to $3.4 billion.

The chairman said the bank had no direct exposure to troubled European government debt impacted by the eurozone crisis.

"Loans and advances amounted to $6.8 billion, being slightly higher than at the 2011 year end level. There was a further improvement in the Bank’s funding profile during 2012 with a $1.1 billion increase in customer deposits and a $1 billion increase in bank deposits," revealed Al-Suhaimi.

"GIB’s robust funding position reflects the confidence of the bank’s customers and counterparties based on its strong ownership and financial strength. The Basel 2 total and tier 1 capital adequacy ratios at the quarter end were an exceptionally strong 20.6 per cent and 17.0 per cent respectively," he added.

GIB is a leading bank in the Middle East with its principal focus on the GCC states. The Bank is owned by the six GCC governments, with the Public Investment Fund of Saudi Arabia holding a majority stake (97.2 per cent).

In addition to its main subsidiary Gulf International Bank (UK), the bank has branches in London, New York, Riyadh and Jeddah, in addition to representative offices in Beirut and Abu Dhabi.-TradeArabia News Service