GULF INTERNATIONAL BANK REPORTS NET PROFIT OF $37.9 MILLION ATTRIBUTABLE TO SHAREHOLDERS
Gulf International Bank (“GIB”) announces its year ended 31st December 2021 financial results.
The fourth quarter of 2021 recorded a marginal net loss attributable to the Shareholders of the Bank of $1 million, compared to a loss of $104.3 million which represents 99% improvement in the same quarter last year. All revenue categories reflected growth compared to the same quarter last year, with net interest income of $65.8 million up 13% and fee and commission income of $23.8 million reflecting significant growth of 32%. Positive market environments resulted in trading income of $3.6 million being 171% up, and foreign exchange income of $2.2 million representing a 214% increase. Other income of $5.1 million was 132% higher and the significantly lower fourth quarter provision charge of $8.4 million compared to a $130.5 million in the same quarter last year. Despite the significant improvement across revenue categories, and in the Bank’s cost of risk, operating expenses for the quarter were higher due to investment in strategic initiatives.
The basic and diluted earnings per share attributable to the Shareholders of the Bank amounted to a loss of US 0.04 cents during the fourth quarter of 2021, compared to a loss of US 4.17 cents for the same period last year. Total comprehensive income attributable to the Shareholders of the Bank during the quarter of $3.1 million compared to a loss of $60.1 million for the same period last year, driven by the positive revaluation gains.
For the year ended 31st December 2021, GIB reported a net profit of $37.9 million attributable to the Shareholders of the Bank, compared to a loss of $249.6 million last year due to higher revenues and lower provisions. Despite a challenging business environment, GIB had a successful year with marked growth of 28% in revenues across all business lines. The Group’s net income for the year ended 31st December 2021 amounted to $52.7 million compared to a loss of $308.0 million for the same period last year.
Basic and diluted earnings per share attributable to the Shareholders of the Bank were US 1.52 cents compared to a loss of US 9.98 cents per share in 2020. Total comprehensive income attributable to the Shareholders of the Bank of $64.8 million compared to a $224.1 million loss last year.
GIB’s Chairman Eng. Abdulla Al Zamil commented “2021 saw strong performances across GIB’s business lines. Our strategy to reduce dependence on funded credit involved expansion and investment in alternate revenue sources. The success of asset management and advisory in 2021 was a testament to the successful investment in this area. At the same time, we continued to invest in the traditional areas of the Bank: institutional and wholesale banking, to ensure value accretive and fee-generating offerings”.
Fee and commission income of $72.5 million was 23% up on the previous year, reflecting the success of the bank’s strategic initiative of revenue diversification, with higher revenue from asset management, investment banking, retail and global transaction-banking. Both foreign exchange income of $18.5 million and trading income of $32.2 million were significantly higher than 2020. The trading gains resulted from strong market rebounds on portfolios managed by the Bank’s Saudi Arabian (GIB Capital) and London-based (GIB UK) subsidiaries. The Bank recently established a Special Assets Unit that generated revenues of $20.7 million in less than a year since its establishment, compared to $6.5 million in the previous year, highlighting the fortified recovery process now in place and continued diversification of revenue sources.
Total expenses of $296.7 million for the year were only marginally higher than prior year. The provision charge for the year of $45.7 million compared to a $340.5 million charge last year, when the bank prudently increased provisions against its legacy portfolio given the elevated risk triggered by the pandemic. This perceptive judgement has resulted in reducing the cost of risk to pre-pandemic levels.
GIB’s Group CEO Abdulaziz Al-Helaissi commented “We have a coherent strategy for growth, and are extremely well positioned to succeed in the sectors and markets that we want to operate in. After a tremendously challenging two years, GIB has returned to growth mode, and we look ahead to 2022 with immense confidence.”
Total shareholders’ equity excluding minority interest of $2,145.4 million (Dec 2020: $2,071.8 million) increased by 4% and includes capital of $2,500 million (Dec 2020: $2,500 million), reserves of $435.5 million (Dec 2020: $379.2 million) and accumulated losses of $790.1 million (Dec 2020: $807.4 million) that represent 32% of capital.
The Bank continues to maintain a robust balance sheet, with consolidated total assets at the year-end of $31.8 billion, a 7% increase compared to $29.6 billion last year. Cash and other liquid assets, including short-term placements of $13.1 billion represented 41% of total assets, reflecting a high and prudent level of liquidity. Investment securities of $6.0 billion principally comprised highly rated and liquid debt securities issued by major financial institutions and regional governments. Loans and advances of $11.7 billion increased by 11% during the year, with focus on core markets in line with the Bank’s strategy.
The Bank maintained an effective and more diverse funding profile in the year ended 31 December 2021, with customer deposits of $21.0 billion comprising the majority of total deposits. GIB’s strong funding position demonstrates the ongoing confidence of the bank’s customers and counterparties based on its strong ownership and financial strength. The bank’s liquidity coverage ratio of 176.3%, net stable funding ratio of 146.2% and capital adequacy ratio of 16.1% are all significantly above regulatory limits.
GIB BSC’s CEO Jamal Al Kishi commented “GIB broadened its funding base with the highly successful issuance of a sustainability-linked syndicated loan. The transaction was met very favourably by global investors, priced at the tight end of the spectrum, and was upsized to meet demand from an initial target of $500 million to $625 million.”
GIB embarked on its sustainability journey a few years ago. The Bank firmly believes that companies that help solve the world’s biggest problems will be those that will have the strongest financial performance going forward.
In line with the sustainability focus, GIB 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.
GIB’s Outlook has recently been revised to Stable from Negative by three rating agencies: Fitch Ratings, Moody’s Rating and Capital Intelligence.
The financial statements for the year ended 31st December 2021 were audited by the external auditors, Ernst & Young (EY), and comply with International Accounting Standard 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.