JEDDAH — Gulf International Bank BSC (GIB) a $26.5 million consolidated net income after tax for the first three months this year ending March 31, compared to $31.8 million in the prior year period. Total income at $64.1 million was $2.3 million or 4 percent up on the prior year with year-on-year increases recorded in all income categories with the exception of fee and commission income and other income. Net interest income at $35.3 million for the three months was $3.4 million or 11 percent up for the same period last year. The year-on-year increase in net interest income principally reflected increases in both loan volumes and loan margins as the bank successfully reorientates its lending activity from transactional-based long term project and structured finance to relationship-based large and mid-cap corporates. As recognized by the international rating agencies, the managed reduction in the leverage of the loan portfolio that has taken place over the last few years to a more prudent multiple of equity has strengthened the bank's risk positioning. Fee and commission income at $13.9 million comprised almost one quarter of total income, reflecting the successful implementation of GIB's new strategic focus on non-asset based, relationship-orientated services and on supporting customers' commercial and trade finance requirements. A slight year-on-year decrease in fee and commission income was attributed to an exceptionally high level of commissions on letters of credit and guarantee in the prior year period. Foreign exchange income at $6.5 million for the quarter was $3.8 million up on, or more than double, the in the same period last year. This was attributable to an increase in customer-related foreign exchange revenue. Trading income at $7.4 million was $2.0 million or 37 percent up on the prior year. Trading income comprised revaluation gains on investments in funds managed by the Bank's London-based subsidiary, GIB (UK) Limited. Other income of $1.0 million for the quarter compared to $6.4 million in the prior year period. However, prior year income principally comprised exceptional, one-off income items including the recognition of dividend income arising on the adoption of IFRS 9, and recoveries of impaired loans. Total expenses at $33.8 million for the three months were $3.7 million or 12 percent up on the prior year period. The year-on-year increase in expenses was attributable to ongoing investment in the implementation of GIB's new GCC-focused universal banking strategy. A $3.0 million provision charge was recorded in the first quarter. The limited provisioning requirement reflected prudent and conservative provisioning actions taken in prior years. – SG
