Gulf International Bank profit increases by 26 per cent to historical record of USD255.5 Million

Consolidated net income after tax at $255.5 million for the year was $52.5 million or 26 per cent up on the prior year. This represented the highest ever result in the bank's history. The strong performance reflected continued growth across all of the bank's principal business activities. The significant year-on-year increase in the Group's profit was attributable to increases in both interest and non-interest earnings, the containment of expenses, and a lower level of provisions. The increase in interest earnings was principally due to significantly higher loan volumes, related in particular to GCC project and structured financings. In this context, GIB again successfully maintained its position as the leading provider of project and structured finance services in the MENA region in 2006. Non-interest income benefited in particular from strong fee-based income derived from the Group's strategically important merchant banking activities, including asset and fund management and corporate advisory. Fee and commission income rose by $19.6 million or 42 per cent to $65.8 million for the year. Total operating expenses increased by only 4 per cent, reflecting the ongoing containment of costs.

Consolidated total assets rose to $24.8 billion at the end of 2006, representing an increase of $1.9 billion over the prior year end. The increase was principally attributable to significant growth in the loan portfolio. Loans and advances rose by $1.9 billion during the year to $8.1 billion at the year end. This reflects GIB's position as the leading financier and arranger of specialised lending within the GCC, including petrochemical and gas projects, as well as shipping and aircraft finance, and Islamic finance. Shareholders' equity amounted to $1,857 million at the 2006 year end. The BIS risk asset ratio at 31st December 2006 was 11.6 per cent being very comfortably above the regulatory minimum of 8 per cent. As recognised by the international credit rating agencies, the Group's balance sheet-related financial ratios are exceptionally strong with the Liquid Assets Ratio standing at a particularly high 65.2 per cent.

The 2006 consolidated financial statements are subject to ratification at GIB's 30th General Assembly meeting and will be available immediately thereafter.