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Gulf International swings to $21.2m net profit in Q3

November 15, 2021
banking

Gulf International Bank (GIB), a pan GCC universal bank, has posted a net profit of $21.2 million attributable to shareholders in the third quarter of 2021 compared to a loss of $59.9 million in the same quarter last year.

The increase is driven by stronger performance across all revenue categories. Net interest income of $64.3 million represented growth of 11%, whilst fee and commission income of $15.4 million represented growth of 8%. Trading income of $8.5 million was the result of a 15% increase driven by favourable market conditions, and foreign exchange income of $6.2 million represented a 72% increase in foreign exchange income.

Other income of $16.5 million, almost 3x higher was the result of proactive measures taken in relation to asset recoveries and lower third quarter provision charge of $14.2 million compared to a $94.7 million in the same quarter last year.

The basic and diluted earnings per share attributable to the Shareholders of the Bank amounted to US 0.85 cents during the third quarter of 2021, compared to a loss of US 2.40 cents for the same period last year. Total comprehensive income attributable to the Shareholders of the Bank during the quarter of $24.1 million compared to a loss of $70.8 million reported for the same period last year, driven by the execution of the Bank’s strategy, resulting in significantly improved performance and positive revaluation gains.

For the period ended September 20, 2021, GIB reported a net profit of $38.9 million attributable to the Shareholders of the Bank compared to a loss of $145.3 million in the same period last year. This was achieved through remarkable growth of 26% in revenues, whilst operating expenses remained flat. The Group’s net income for the period ended 30th September 2021 amounted to $52.5 million compared to a loss of $174.6 million for the same period last year.

In line with the Bank’s strategic focus on revenue diversification, a $54.8 million increase in non-interest income compared to a $5.6 million increase in net interest income. Fee and commission income of $48.7 million was 19% up on the previous year, reflecting the success of the bank’s strategic initiatives with higher revenue from asset management, corporate advisory, trade-related and global transaction-banking. Both foreign exchange income at $16.3 million and trading income of $28.6 million were significantly higher than 2020. The trading revenues were reflective of the strong market rebound on portfolios managed by the bank’s Saudi-Arabian (GIB Capital) and London-based (GIB UK) subsidiaries.

Total expenses of $200.1 million for the period were in line with prior year period. The provision charge for the period of $36.1 million compared to a $210.0 million in the same period last year, a year in which the bank prudently increased provisions against its legacy portfolio given the elevated risk brought about by the pandemic.

Basic and diluted earnings per share attributable to the Shareholders of the Bank were US 1.56 cents compared to a loss of $5.81 cents per share in the same period last year. Total comprehensive income attributable to the Shareholders of the Bank reached $61.7 million compared to a $164.0 million loss in the same period last year.

The bank’s funding profile remained robust for the period ended 30 September 2021 with customer deposits amounting to $23.3 billion, and 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 140.7%, net stable funding ratio of 144.6% and capital adequacy ratio of 16.3% are all significantly above regulatory limits.

GIB has successfully closed a $625.0 million sustainability-linked syndicated loan (SLL), making GIB the first Bahrain-headquartered bank and the first majority Saudi-owned bank to close such a facility.

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