It said net income
after tax in the second quarter was $36.6 million, representing a $7.1
million or 24 percent increase over the second quarter profit in 2010.The
year-on-year increase in net income was attributable to increases in
all income categories, with the exception of net interest income, and a
lower net provision charge. Net interest income at $74.1 million for the
six months was 15 percent down on the prior year period. According
to the statement, the year-on-year decrease was attributable to a lower
average loan volume and an increase in the cost of term finance as a
result of initiatives to further minimize the mismatch in the maturity
profile of the bank’s assets and liabilities. While these
initiatives have resulted in an additional cost, they have significantly
reduced the bank’s reliance on short-term wholesale funding and will
ensure compliance with the new Basel 3 regulatory rules on liquidity
risk management well ahead of the planned implementation deadlines. The impact on income of the reduction in the loan volume was partly offset by an increase in loan margins. Fee and commission income at $26.5 million was $9.6 million or 57 percent higher than in the prior year period. As
a result, fee-based income comprised almost one quarter of total
income, reflecting continued success in the implementation of GIB’s new
strategic focus on non-asset-based, relationship-orientated services. Significant year-on-year increases were recorded in both trade finance and investment banking fees. Trading
income at $9.8 million was $3.9 million or 66 percent up on the prior
year, reflecting strong customer-related foreign exchange revenues. Total expenses at $55.3 million for the six months were nine percent up on the prior year period. The
year-on-year increase in expenses reflected ongoing investment in the
implementation of GIB’s new GCC-focused universal banking strategy. Consolidated
total assets at the half-year end were $17.4 billion, being $1.8
billion or 12 percent higher than the 2010 year-end level. The asset
profile at June 30, 2011 reflected an exceptionally high level of
liquidity. Cash and other liquid assets, and short-term placements
totaled $6.6 billion, representing a very high 38 percent of total
assets. Investment securities at June 30, which principally
comprised highly rated and liquid debt securities issued by major
financial institutions and regional government-related entities,
amounted to $3.4 billion. The bank has no exposure to troubled
European government debt and has accordingly not been impacted by the
recent turmoil in the European debt market.
