MANAMA, 1 June 2007 — TAIB, a Bahrain-based bank, showed a strong financial performance in 2006, with a record profit of $22.4 million or an increase of 20 percent from $18, 664 million generated in 2005.
The bank’s financial statement for the whole year released recently reflected its impressive accomplishment which had broken all previous records since its inception in 1979.
Abdulaziz R. AlRashed, chairman of TAIB, said that the highest profit ever achieved by the bank was due to its “understanding of client’s needs, combined with the “value add” that we have developed over the years” which “has resulted in winning the trust and confidence of our investors … essential in building enduring relationships.” He added that “TAIB’s strategic shift to become a private bank in 2004 has indeed served us well.”
The bank’s total operating income jumped by 13 percent to $49.4 million from $43.6 million in the period under review. Fee and other income soared to $43,223 million from $35,962 million, a 20.2 percent increase.
Shareholders’ equity improved by 13.7 percent to $162,537 million from $142,970 million. As a result, share price increased 27 percent to $1.60 per share or an earning of US 22 cents each. Return on average equity grew 14 percent from 12.7 percent, as well as the return on average assets which climbed 5.1 percent from 4.5 percent. The bank’s balance sheet revealed further strength with record level of total equity at $169,597 million, a 13.5 percent increase from $149,453 million, leading to further reduction in leverage ratio to 1.6.
Liquid assets improved significantly to a very healthy 64.5 percent in 2006 from 50.5 percent in the preceding year.
However, total assets were pared down a little bit to $434,017 million from $435,051 million. Total deposits likewise contracted by 11.9 percent to $229,176 million from $260,133 million.
TAIB’s performance last year projected a strong capital base as indicated by a robust capital adequacy ratio of 57.8 percent, up from 42.5 percent a year ago.
Iqbal G. Mamdani, vice president and chief executive officer of the bank, said TAIB’s remarkable performance in 2006 stemmed from the earnings of main asset classes that the bank offered to investors and clients, such as real estate investments, private equity investments, asset management products and brokerage services. Transaction volume in real estate investments during 2006 amounted to $882 million, comprising $714 million in exits from 14 investments and one new acquisition amounting to $168 million, he said. In total, TAIB returned over $141 million to investors during the year, he added.
Mamdani moreover said that its profile as a private bank was bolstered by establishing a standalone real estate investment company called Acacia Real Estate Limited with an authorized capital of $500 million. Besides, TAIB’s regional funds like the Everest Fund for India and Golden Horn Fund for Turkey, attracted more investor interest, he said.
With the continued success of the bank’s management services portfolio, Mamdani disclosed that the bank is “in the process of launching Everest Fund II, another Shariah-compliant fund for India, selecting SBI Funds Management Private Limited and UTI Asset Management Company as managers.
