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Gulf International Bank B.S.C. (GIB) is a Bahraini Shareholding Company incorporated in 1975 and registered as an offshore banking unit with the Bahrain Monetary Agency. The Bank is wholly owned by Gulf Investment Corporation, an international investment company registered in Kuwait and owned equally by the governments of the Gulf Cooperation Counsel - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the U.A.E. The Bank is principally engaged in the provision of wholesale banking services, with a primary focus on the GCC market and the associated trade and financial flows between this area and the industrialised world. The Year in Brief While GIB does not detail the results of its Islamic banking operations separately in its accounts, its Islamic banking activities experienced major growth, with a strong rise in deposits during 1998, particularly from Islamic financial institutions. The Bank was responsible for arranging a number of deals on an Islamic basis and for delivering them to Islamic clients. The strengthening of activity in this important and increasingly competitive area of banking is expected to increase further in 1999. For the Bank as a whole, Net Income after provisions and tax was US$82.1 million for the year, 5% lower than the 1997 figure of US$86.4 million. Return on shareholders' equity was 11.2%. Total Assets grew by 7.2% to US$10.2 billion (1997: US$9.5 billion). Net Interest Revenue at US$115.3 million, up 5.2% on the prior year. Other Income declined by 8.9% to US$49.2 million (1997: US$54.0 million) - 1997 income included an exceptional profit of US$8.6 million realised on the sale of an investment in an associated company. Operating Expenses were 13.3% or US$6.2 million higher at US$52.9 million (1997: US$46.7 million). The ratio of Operating Expenses to Total Income was 39% (1997: 34.96%). Business Highlights Continued diversification in the area of Islamic banking will lead to the introduction of further Islamic products throughout 1999, with an emphasis on project finance and syndication. This area of banking, which is still in its infancy, offers considerable potential for growth, and GIB is committed to providing a diverse range of Islamic products and services for this rapidly burgeoning market. The merger of GIB with Saudi International Bank (based in London) announced at the end of 1998 will bring additional areas of expertise to the Bank, and enable expansion of its range of services. The merger will also assist acceleration of plans to expand into Saudi Arabia where three new branches are planned to be opened shortly, followed by expansion into another GCC country. In late 1997 and early 1998, GIB was one of a group of lead arrangers and underwriters which collectively arranged the 'Deal of the Year' in the petrochemicals industry - a US$2.2 billion loan to Saudi Yanbu Petrochemical Company - the largest non-sovereign loan deal ever undertaken. GIB also arranged and underwrote the Middle East syndication of a US$2.0 billion facility for a liquefied natural gas plant in the Sultanate of Oman. Significant Treasury activities in London, together with a wide variety of major transactions with corporate clients structured in GIB offices London, New York, Lebanon and Singapore contributed strongly to revenues.
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