GIB swings to profit in Q1

TDT | Manama

The Daily Tribune – www.newsofbahrain.com

The Gulf International Bank yesterday posted a first-quarter net profit of $7.9 million, recovering from a loss a year ago, on the strong performances of all revenue streams. The group reported a loss attributable to the shareholders of the parent of $47.4 m in the prior-year period.

Consolidated net profit was $14.1 m compared to a loss of $60.5 m in the same period last year. Basic and diluted earnings per share attributable to the shareholders of the bank reached 0.32 cents compared to a loss of 1.90 cents per share in the prior period. Total revenues of $90.6 m were $17.5 m or 24% up on the prior year with increases recorded in almost all revenue categories.

A $24.5 m increase in non-interest income more than compensated lower net interest income, which was due to the pandemic-driven market reduction in interest rates. Net interest income also benefited from marked increases in both loan volumes and loan margins. Fee and commission income at $17.1 m was 30% up on the previous year.

Foreign exchange income at $5.9 m was in line with the prior-year period and comprised of revenue 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 m was significantly up on the loss recorded in 2020 and largely comprised of a strong rebound on the bank’s trading portfolio through gains on investments in funds managed by the bank’s Saudi-Arabian based subsidiary (GIB KSA) and London-based subsidiary (GIB UK). Other income of $1.8 m was lower than the prior-year period due to a one-off gain on the sale of investment debt securities in 2020.

Total expenses at $65.8 m for the three months were 3% lower than the prior-year period despite incremental costs associated with the strategic transformation and digitisation of the bank’s infrastructure its digital retail banking proposition. The year-on-year decrease in expenses was attributed to the continued focus on cost optimisation and efficiencies.

As a result of the enhanced governance on spend and optimisation, the bank said it expects to continuously improve its cost to income ratio going forward.

Lower charges

The provision charge for the first quarter was $9.8 m, compared to $65.7 m in the first quarter of 2020, a year in which the bank took the prudent measure of providing for the remainder of its historical legacy portfolio.

Total comprehensive income attributable to the shareholders of the parent reached $23.3 m compared to a $58.4 m loss in the prior-year period. Loans and advances amounted to $10.8 billion, being $0.3 billion or 3% higher than at the 2020 year-end. First-quarter customer deposits was $25.7 billion comprising the majority of total deposits.