GIB’s board of directors approved the consolidated financial statements for the year ended Dec. 31, 2010 at a recent meeting.
“I am confident that the bank is well placed to take advantage of new business opportunities, continue its key role in Saudi Arabia and the region as a leading financial institution, and ensure prosperity for all its stake-holders,” said GIB Chairman Jammaz bin Abdullah Al-Suhaimi
Net income after tax in the fourth quarter was $14.3 million compared to a loss of $132.4 million in the fourth quarter of 2009. Net interest income, which at $156.2 million represented the bank’s principal income source, was 24 percent down on 2009.
The year-on-year decrease was attributable to the de-leveraging and de-risking of the balance sheet, and the prevailing historical low level of interest rates.
Fee-related income at $42.2 million was $1.5 million higher than the previous year reflecting the on-going focus by GIB on enhancing fee-based revenue.
Trading profits at $12.7 million largely comprised customer-related foreign exchange income, while other income of $12.7 million consisted principally of dividends received from listed equity investments and profits realized on investment securities.
Total expenses of $113.3 million were $9.5 million or eight percent lower than 2009, illustrating the successful implementation of proactive measures taken in the previous year to align the cost base with the bank’s business model. A net provision charge of only $4.0 million was recorded for 2010, reflecting the prudent and conservative provisioning actions taken by the Bank in 2009.
Al-Suhaimi added: “As a result of the proactive measures to stabilize the bank that were initiated during the previous year, GIB entered 2010 on a cautiously optimistic note, in view of the challenges posed by the ongoing impact of the global financial crisis and continued challenging market conditions in the region.
“With an improved balance sheet structure, GIB was in a stronger position at the beginning of the year to take advantage of new business opportunities arising from the global and regional economic and market recovery and to address the challenges of a return to profitability and the bank’s future strategic direction,” he said.
Al-Suhaimi added: “The ability of GIB to take advantage of a positive outlook for the region will undoubtedly be enhanced by the board’s approval in 2010 of the bank’s new strategy.”
GIB Chief Executive Officer Yahya bin Abdullah Alyahya said GIB’s funding profile was significantly strengthened by the successful closing of a SR3.5 billion ($933 million) five-year bond issue last year.
In November 2009, he said GIB successfully completed a SR2.0 billion three-year bond issue in Saudi Arabia.
