GULF INTERNATIONAL BANK ACHIEVES 62% INCREASE IN FIRST QUARTER NET PROFIT

Gulf International Bank B.S.C. (GIB) reported a net profit of $12.8 million for the first quarter of 2022 attributable to the shareholders of the parent, compared to a net profit of $7.9 million in the prior year period, an increase of 62% due to higher net interest income and net fee and commission income. The consolidated GIB Group recorded a net profit of $21 million compared to a net profit of $14.1 million in the same period last year, an increase of 49%. 

Total revenues of $109.0 million for the three months were $18.4 million or 20% up on prior year with increases recorded in almost all revenue categories. The year-on-year increase in the bank’s core revenue reflects the continued progress in implementing the bank’s strategic transformation plan. 

Net interest income at $ 67.9 million was 21% higher than prior year, due to balance sheet growth and the stabilisation of markets resulting in higher yields. Fee and commission income at $23.1 million was 35% up on the previous year, reflecting the continued success of the bank’s strategic revenue diversification initiatives. Increases were recorded across asset management, corporate advisory, lending-related, global transaction-banking and retail fees. Foreign exchange income at $4.7 million was lower than the prior year period by 20% as a result of lower volumes in anticipation of increased Fed rates and comprised revenues derived from customer-related activities, including structured products designed to assist customers in hedging their foreign exchange exposures in current volatile markets. Trading income at $9.8 million was in line with the prior year and comprised gains on investments in funds managed by the bank’s Saudi-Arabian based subsidiary (GIB Capital) and London-based subsidiary (GIB UK). Other income of $3.5 million for the three months was 94% or almost double prior year levels due to a strategic and focused approach on monetising recoveries from previously written-off loans. 

Total expenses at $74.4 million for the three months were 13% higher than the prior year period and reflects the Bank’s continued investment in human capital. 
The provision charge for the first quarter was $9.8 million in line with the provision charge in the first quarter of 2021 and reflective of the Bank’s prudent approach to risk management with  NPL ratio reduced to 2.6% as at 31st March 2022. 

Basic and diluted earnings per share attributable to the shareholders of the Bank of 0.51 cents compared to 0.32 cents per share in the prior year. Total comprehensive income attributable to the shareholders of the parent of $29.4 million compared to $23.3 million in the prior year representing an increase of 26%, driven by fair value gains on FVOCI investments, and a much improved 2022 performance. 

Total shareholders’ equity excluding minority interest increased by 1% during the year to reach $2.2 billion (December 2021: $2.1billion) and includes accumulated losses of $777.3 million which represent 31% of capital, and reserves of $452.1 million which represent 18% of capital. 

Consolidated total assets at the quarter end were $33.0 billion, up 4% from December 2021 levels of $31.8 billion. Cash and other liquid assets, and short-term placements totalled $14.9 billion (45% of total assets), representing a continued high level of liquidity. Investment securities principally comprised highly rated and liquid debt securities issued by major financial institutions and regional government-related entities amounted to $5.8 billion at the end of the first quarter. Loans and advances amounted to $10.7 billion, being $0.9 billion or 8% lower than at the 2021 year-end. 

The bank’s funding profile remained robust in the first quarter of 2022 with customer deposits of $22.3 billion comprising the majority of the Bank’s deposit base. GIB’s strong funding position demonstrates the confidence of the Bank’s customers and counterparties, based on its strong ownership and financial strength. This provides a stable platform for the growth expected in the remainder of the year and is reflected in the liquidity coverage ratio of 139.0% and the net stable funding ratio of 142.6%, both significantly above regulatory limits. The Basel 3 total capital adequacy ratio at the quarter end was strong at 16.6%. 

The financial statements for the first quarter of 2022 were reviewed by the external auditors Ernst & Young (EY) and comply with International Accounting Standard (IAS) 34 – Interim Financial Reporting. 

Fitch Ratings has revised Gulf International Bank B.S.C.'s (GIB) Outlook to Positive from Stable and affirmed its Long-Term Issuer Default Ratings (IDRs) at 'BBB+'. 

Gulf International Bank B.S.C. is a pan GCC universal bank established in 1975 and regulated by the Central Bank of Bahrain. GIB’s services are delivered across the GCC and international markets through its subsidiaries: GIB Saudi Arabia, GIB (UK) Ltd. Additionally, the bank has branches in London, New York, and Abu Dhabi, in addition to a representative office in Dubai. 

GIB is owned by the governments of the Gulf Cooperation Council countries, with Saudi Arabia’s Public Investment Fund being the primary shareholder.