International Investment Bank (IIB), a globally focused investment bank based in Bahrain, posted a net profit of $12 million for the 9 months ending September 30.

The figure was a decrease of 14 per cent compared to $14 million earned in the first nine months of 2007.

The result reflects the cautious approach to investment endorsed by the board in the wake of the current uncertainties in the global financial markets, said a statement.

Total Income increased by 8.2 per cent to $26.9 million in the first nine months of 2008, mainly from investment banking fees that increased by $2.4 million or 12.3 per cent to $21.5 million, generated from the structuring, underwriting and placement of new investments. In the same period last year, the bank registered a non-recurring capital gain of $1.4 million on the sale of an investment property in Bahrain.

Total expenses increased by $4.0 million in 2008 to $14.9 million, arising from staff and transaction costs from its growing business activities.

Profitability Ratios for the nine-month period of 2008 included annualised returns on Paid up Nominal Capital of 14.6 per cent and on Average Equity of 7.4 per cent.

Capital Adequacy as at September 30, 2008 of 104 per cent is eight times greater than the minimum requirement of 12 per cent by the Central Bank of Bahrain, the bank said. This demonstrates a strong and prudent approach by the Bank  in respect of  risk management, it said.
 
Commenting on the bank's results, Saeed Abdul Jalil Mohammed Al Fahim, chairman of IIB, said: “The bank’s performance in 2008 has been satisfactory, bearing in mind the current global financial turmoil gripping the markets. The board has adopted a conservative approach to risk, and continues to be very cautious and exacting in selecting investments for its clients. IIB has no exposure to sub-prime or any other 'toxic' assets. With no borrowings on its balance sheet, the bank has no liquidity concerns and places its surplus funds with several highly rated banks in the GCC region.”

Aabed Al-Zeera, CEO and a board member, commented:  “During the first nine months of 2008, IIB completed the placement of a real estate development project in Abu Dhabi and a private equity investment in Amrahbank, a commercial bank located in Azerbaijan, that we intend to expand and convert its operations to comply with the Shari’ah.

"New offerings have included the structuring and placement of an equity stake in a leading vehicle distributor, ARTES, located in Tunisia, being IIB’s first investment both in Tunisia and in the car distribution sector. The subsequent IPO of ARTES was the largest on the Tunis Stock Exchange in the last 10 years and was over-subscribed more than 10 times. The bank has also structured and mainly placed an investment in a green field sugar plant to be constructed in the Kingdom of Bahrain,” he said. -TradeArabia News Service