GULF INTERNATIONAL BANK REPORTS 2018 FINANCIAL RESULTS

Gulf International Bank B.S.C. (GIB) today announced its financial results for the full year ended 31st December 2018. Net income before provisions and tax for the year increased by 11% to $133.1 million compared to $120.3 million in the prior year, reflecting continued growth and higher contributions from the Bank’s diversified business lines.

After an exceptional provision charge of $353.3 million, the Bank reported a net loss of $227.0 million, compared with net income of $70.0 million in the prior year. The net loss for the last quarter of the year was $97.1 million, relating to higher provisions taken in the last quarter. The provisions related to challenging macro-economic conditions, which impacted the business environments of several GCC countries in which the Bank operates, contributing to a number of borrowers experiencing stressed financial circumstances and resulting in a higher level of non-performing loans during 2018.

Consistent with the Bank’s prudent approach to provisioning, increased provisions were pro-actively made, and the higher level of provision coverage at 103 per cent will enable the Bank to focus on its strategic and business initiatives in 2019 without undue distractions, and enable the planned new subsidiary in Saudi Arabia, an important milestone in the Bank’s regional expansion initiatives, to commence operations on a firm footing.

Total income for the year increased by 11 percent to $398.5 million compared to $360.3 million in the prior year. Net interest income rose by 8 percent to $273.7 million from $253.1 million in 2017, reflecting positive progress in the implementation of the Bank’s strategy. Non-interest income increased by 16% to $124.8 million, attributable to higher client-related income derived from treasury products and higher returns on asset management portfolios. Non-interest income also included a recovery on a previously written-off loan, which conforms to the Bank’s persistence in seeking recoveries even where loans have been fully provisioned or written off.

Total expenses for the year were $265.4 million compared to $240.0 million in the prior year, attributable to costs associated with the ongoing implementation of the Bank’s business diversification and expansion strategy, including the new subsidiary in Saudi Arabia, as well as additional investments in the IT infrastructure to support the launch of innovative products and services.

To read this article in full, visit GIB (UK)

Author: The Muslim Wealth Portal

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