International Investment Bank announces its 1st half 2009 results

Total Income for the first half of 2009 was $3.8m, mainly derived from investment banking fees generated from the structuring, underwriting and placement of new investments, together with profit earned on Murabaha funds placed with financial institutions.

Total Expenses reduced to $4.9m in the period, reflecting the lower business activity as compared to a year ago. After booking an impairment loss of $0.3m on a listed investment, the Bank incurred a Net Loss of $1.4m compared to a Net Profit of $11.3m earned in the same period of 2008. The decrease is mainly attributed to fewer investment banking transactions and lower profit rates applicable to bank placements as the Bank intentionally slowed down its investment activities as a prudent measure during the current market situation. The Net Loss for the second quarter of this year was $0.4m compared with Net Income of $5.9m for the same period last year.

Total Assets at 30 June 2009 were $197.1m compared to $218.7m at year end 2008. The decrease principally arises following the payment in 2009 of the 2008 cash dividend of 7% and fair value write downs on several available for sale investments, a prudent measure, given the prevailing market conditions

Capital Adequacy Ratio was 66% as at 30 June 2009 which is more than five times the Central Bank of Bahrain's minimum requirement of 12%, demonstrating IIB's capacity to significantly increase its investment portfolio in the future from a regulatory capital perspective.

Commenting on the Bank's results, his Excellency Mr. Saeed Abdul Jalil Mohammed Al Fahim, Chairman of IIB, said:

"Trading conditions in 2009 are very challenging for investment banks. However, we remain hopeful of an improvement in investors' sentiment during the second half of this year. During the current difficult global conditions, the Bank has adopted the strategy of prudent investing, strict liquidity management and capital protection. IIB's asset position demonstrates strength with 43% of Total Assets represented by cash and short-dated Murabaha placements with financially-sound regional banks plus a further 12% invested in regional listed equities, giving a total liquidity position of 55%."

Commenting on the 2009 results, Mr. Aabed Al-Zeera, CEO and Board member said: "Since inception of the Bank, our strategy has been to structure and market to clients a range of attractive investment offerings in the manufacturing, financial, energy and real estate sectors in various countries. During 2009, IIB has concluded the placement of its investment in a sugar refinery to be built in the Kingdom of Bahrain and has recently invested in a project to develop a state-of-the-art real estate complex in Bosnia and Herzegovina.

Several deals are being evaluated for product launches expected later in the year. Due to the cyclical nature of the Bank's operations whereby revenues are closely linked to completed investment transactions, the performance in the first half is not reflective of the expected outcome for the remainder of 2009. IIB's balance sheet is strong, evidenced by no borrowings or off balance sheet commitments."