BMB Investment Bank mid year profits surge to USD9.2 million

The results show a third consecutive quarter of return to profitability for the Bank. The profit for the second quarter of 2005 stood at US $3 million versus a loss in the second quarter of 2004 of US $2.1 million.

Income from investments played a major role in this profitability and amounted to US $19.3 million, up 338% from the first half of 2004 income from investments of US $4.4 million. This was partially offset by a loss of US $3.9 million in foreign exchange versus a loss of US $0.2 million in the first half of 2004. This loss is primarily a result of the fact that the Bank continues to be unable to hedge its foreign currency denominated assets due to lack of inter-bank foreign exchange lines.

As of June 30th 2005, the Bank's total assets stood at approximately US $184 million as compared to US $182 million at 31 December 2004. Total shareholders' equity at the end of the first half of 2005 stood at negative US $24.1 million as compared to negative US $27.8 million at the end of 2004. However, since the end of the first half of 2005 the Bank has been successful in raising US $52.33 million in new capital from its rights issue and debt for equity conversion which concluded on July 25th 2005.

The Bank's full mid year report can be obtained through the Bank's web site at www.bmb.com.bh.

In commenting on the results, Shaikh Ali Jarrah Al-Sabah, Chairman, said:
'We are extremely pleased with our continued excellent performance this year. The success of our capital raising exercise combined with our healthy return to profitability continues to move us down the path of regaining our position among the leading investment banks in the region.'

Albert I. Kittaneh, Chief Executive, said:
'While the Bank continues to suffer the negative effects of the lack of inter-bank and foreign exchange lines and the subsequent volatility it creates in our earnings, our strategy is clearly bearing fruit and the strength of the assets in our private equity book continue to propel the Bank forward. We expect the momentum driving us on this path of recovery and improvement to be maintained and we look forward to further profitability in the coming years.'

Bahrain Middle East Bank (E.C.) was established as an Offshore Banking Unit in 1982. The Bank's shares, which are currently suspended, are expected to resume trading on the Bahrain Stock Exchange under (BMEB.BH) on September 4th 2005 after the completion of the Bank's capital restructuring.