GIB's General Assembly ratifies 2003 consolidated accounts

GIB recorded consolidated net income after tax of $106.1 million for the year being $20.8 million or 24.4 per cent up on the previous year. The General Assembly also approved the payment of a $53 million dividend from the 2003 profits.

Commenting after the meeting, H.E. Shaikh Ebrahim K. Al-Khalifa, GIB's Chairman and Undersecretary of State at the Ministry of Finance & National Economy, Kingdom of Bahrain, said: "This has been an extremely rewarding year for GIB. Significant improvements and advances were successfully achieved across the Group's key business activities enabling GIB to record its second highest ever result. Given the numerous political and economic uncertainties which challenged the early stages of global economic recovery in 2003, GIB's performance was particularly creditable and further testimony to the resilience of the Group's GCC-focused merchant banking strategy. The objective of enhancing returns to shareholders is being fulfilled and favourable recognition has been accorded to the bank by the international credit rating agencies. In particular, the Fitch and Moody's credit rating agencies recently raised GIB's long term ratings to A- and BBB+ respectively. The rating upgrades reflect the successful implementation of GIB's merchant banking strategy and the resultant improvement in the Group's financial performance".

Dr. Khaled Al-Fayez, GIB's Chief Executive Officer, explained that: "The Group's return on average shareholder's equity at 8.4 per cent in 2003 compared favourably against prevailing investment benchmarks. The significant year-on-year increase in the Group's profit was due to substantially higher non-interest earnings and a lower level of provisions. A decrease in net interest income resulting from the lower interest rate environment prevailing during the year was more than offset by a $31.9 million or 36.1 per cent increase in non-interest earnings. This increase was largely attributable to strong trading revenues although also partly reflected the bank's strategic emphasis on merchant banking activities with investment banking and management fees rising by 11 per cent over the previous year. A key feature of the year was a focus on the provision of effective and competitive services to our customers, the further diversification of the Group's revenues, and the disciplined and proactive management of risk".

Consolidated total assets rose by $1.1 billion to $17.3 billion at the end of 2003, principally due to advances in loans and available-for-sale securities. An increase in shareholders' equity to $1.4 billion at the 2003 year end was partly attributable to the profit for the year although also more significantly to a substantial increase in the fair values of the Group's available-for-sale securities which are accounted for in equity in accordance with international accounting standards. The BIS risk asset ratio at 31st December 2003 was 12.5 per cent being very comfortably above the regulatory minimum of 8 per cent and also at a level that will comfortably accommodate desired future balance sheet growth. As recognised by the international credit rating agencies, the Group's balance sheet-related financial ratios are strong with the Liquid Assets Ratio standing at a particularly high 76.7 per cent.