BMB Investment Bank profits surge to USD7.8 million

Income from investments continued to be the major contributor to this profitability and for the year 2005 was US $26.9 million as compared to US $7.9 million for 2004. The Bank expects its niche private equity funds to continue to play a key role in this ongoing income strength.

Meanwhile the Bank's general and administrative expenses for the year 2005 amounted to US $8.8 million as compared to US $9.0 million for 2004. These figures include the consolidation of one of the Bank's non-core investments, T&T Beverages Ltd.

The Bank's assets decreased from US $182 million at 31 December 2004 to US $168 million at 31 December 2005 primarily due to repayments of existing debt and funding of customer investments.

The year 2005 also proved a turning point for the Bank on several other fronts. The finalization of the Bank's refinancing of its US $75 million syndicated loan facility paved the way in the second half of the year for a capital re-organization and increase. Over US $52 million in new capital was raised from both cash subscriptions and a conversion of debt into equity which then allowed for the resumption of trading in the Bank's shares on the Bahrain Stock Exchange.

Going forward the Bank plans to continue its focus on private equity fund investments and on reviving its client business. At the same time the Bank will continue to look at developing less market sensitive revenues to help reduce volatility in earnings.

In commenting on the results, Shaikh Ali Jarrah Al-Sabah, Chairman, said:

'BMB has finally turned the corner after a very difficult few years. We now have the core elements in place to help us continue moving forward on the path to restoring the Bank's franchise and former standing. We are extremely confident that the faith placed in us by our shareholders and other supportive partners will prove to be very well placed over the coming years.'

Albert I. Kittaneh, Chief Executive, said:
'The fundamental soundness of our assets, combined with the dedication and competence of our staff has seen us through some very difficult times. We are confident our franchise will continue to drive us forward and we look forward to the challenge of the times ahead and to the rebuilding of our banking relationships.'

Bahrain Middle East Bank (BSC) was established as an Offshore Banking Unit in 1982. The Bank's shares are listed on the Bahrain Stock Exchange under (BMEB.BH) and are held by shareholders across the GCC.