MANAMA: Gulf International Bank announces its 2021 semi-annual financial results including the second quarter.
The second quarter of 2021 witnessed a significant increase in net profit attributable to the shareholders of the bank reaching $9.8 million compared to a loss of $37.9m in the same period last year.
This increase is attributable to a 11 per cent growth in net interest income reaching $60m, a 20pc increase in fees and commission income to $16.2m, a reduction of 3pc in operating expenses and a notable increase in trading income to reach $10.3m driven by favourable market conditions.
The second quarter provision charge was $12.1m, compared to a $49.6m in the second quarter of 2020.
The basic and diluted earnings per share amounted to 0.39 cents during the second quarter of 2021, compared to a loss of 1.52 cents in the same period last year.
Total comprehensive income attributable to the Shareholders of the bank during the quarter amounted to $14.3m, compared to a loss of $47.5m reported for the same period last year driven by strong performance and positive revaluation gains.
For the first half of 2021, GIB reported a net profit of $17.7m attributable to the shareholders of the bank compared to a loss of $85.4m in the prior year period.
This was achieved by a growth of 27pc in revenues and a 3pc decrease in expenses reflecting the continued success in implementing bank’s strategic transformation plan.
The group’s net income for the half year ended June 30, 2021 reached $28.5m compared to a loss of $102.1m for same period last year.
On the revenue side, the bank achieved a year-on-year increase of $39.5m in non-interest income and slight drop in net interest income impacted by post-pandemic market conditions.
Fee and commission income of $33.3m was 25pc up on the previous year, reflecting success of the bank’s strategic revenue diversification initiatives led by higher fees from asset management, corporate advisory, trade-related and global transaction-banking.
Foreign exchange income of $10.1m was slightly lower than the prior year period.
Expenses
Trading income of $20.1m was significantly up as compared to the loss recorded in 2020, and largely comprised of a strong market rebound on portfolios managed by the bank’s Saudi-Arabian based subsidiary (GIB Capital) and the London-based subsidiary (GIB UK).
Total expenses of $129.7m for the six months were 3pc lower than the prior year period due to continued focus on cost optimisation and operational efficiencies.
The provision charge for the first half was $21.9m, compared to a $115.3m in the first half of 2020, a year in which the bank prudently increased the provisions given elevated risk triggered by the pandemic and its impact on the legacy portfolio.
Basic and diluted earnings per share attributable to the shareholders of the bank reached 0.71 cents compared to a loss of 3.42 cents per share in the prior period.
Total comprehensive income attributable to the shareholders of the bank reached $37.6m compared to a $105.8m loss in the prior year period, driven by a strong performance and market rebound.
Total shareholders’ equity excluding minority interest increased by 2pc during the period to reach $2.1 billion (Dec-20: $2.1bn) and include accumulated losses of $805.1m that represent 32pc of capital and reserves of $423.3m which represent 17pc of capital.
Consolidated total assets at the quarter end were $29.9bn up by 1pc from December 2020 level of $29.6bn.
Cash and other liquid assets including short-term placements reached $13.7bn, representing high level of liquidity and 46pc of total assets.
Investment securities of $4.4bn principally comprised highly rated and liquid debt securities issued by major financial institutions and regional government related.
Loans and advances increase by 4pc during the year to reach $10.9bn.
The bank’s funding profile remained robust in the first half of 2021 with customer deposits of $19.8bn 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 161.2pc and net stable funding ratio of 156.1pc are both significantly above regulatory limits.
The Basel 3 total capital adequacy ratio at the quarter end was strong at 16.6pc.
The financial statements for the first half of 2021 were reviewed by the external auditors Ernst & Young (EY) and comply with International Accounting Standard (IAS) 34 as modified by the CBB.
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