The third quarter of 2021 witnessed a significant increase in net profit attributable to the Shareholders of the Bank, reaching $21.2 million 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 30th September 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 US 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.
Total shareholders’ equity excluding minority interest of $2,142.3 million (Dec 2020: $2,071.8 million) increased by 3% and includes capital of $2,500 million (Dec 2020: $2,500 million), reserves of $425.5 million (Dec 2020: $379.2 million) and accumulated losses of $783.2 million (Dec 2020: $807.4 million) that represent 31% of capital.
Consolidated total assets at the quarter end of $33.2 billion were 12% up from the December 2020 level of $29.6 billion. Cash and other liquid assets, including short-term placements, of $16.1 billion represented a high and prudent level of liquidity and 49% of total assets. Investment securities of $4.8 billion principally comprised highly rated and liquid debt securities issued by major financial institutions and regional governments. Loans and advances of $11.4 billion increased by 9% during the period, in line with the bank’s strategy.
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. The deal was well received in the international markets and substantially over-subscribed with commitments exceeding the initial facility amount of USD 500 million by more than two times, reaching USD 1.1 billion. Given the high interest, GIB decided to upsize the facility amount to USD 625 million. A diversified group of more than 20 global investors from the US, Europe, the Middle East and Asia participated in the landmark transaction that incorporates Environmental, Social and Governance (ESG) metrics related to reductions in carbon emissions, gender diversity and sustainability reporting. The SLL reflects GIB’s focus on mobilising capital in support of a more sustainable economic landscape for its clients and stakeholders.
The financial statements for the period ended 30 September 2021 were reviewed by the external auditors, Ernst & Young (EY), and comply with International Accounting Standard (IAS) 34 as modified by the CBB.
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 main shareholder.
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