Total income for the first quarter was $3.2 million compared to $0.9 million a year earlier, mainly derived from investment banking fees and profit earned on funds placed with financial institutions. Total expenses reduced to $1.4 million in the period, a reflection of management’s stringent ongoing cost control policy. Share of loss from associates was $0.2 million compared with $0.7 million in the first quarter of 2011. After booking Gains on foreign exchange of $0.1 million, the bank earned net income of $1.7 million in the period compared with a net loss of $1.3 million in the same period last year.
Total Assets at 31 March 2012 were $151.4 million compared to $148.5 million at year end 2011. The increase principally arises from the purchase of investments of $3.4 million in 2012 funded partially by the profit made during the first quarter.
Capital Adequacy Ratio was 36% as at 31 March 2012 versus the Central Bank of Bahrain’s minimum requirement of 12%, demonstrating IIB’s capacity to significantly increase its investment portfolio in the future from a regulatory capital perspective.
“Trading conditions in 2012 continue to be very challenging for investment banks for two principal reasons. Firstly, many investors have incurred significant losses during the past 3 years on their regional and global portfolios and have, therefore, been reluctant to commit to making new investments. Secondly, many regional banks have suspended the provision of financing of real estate development and private equity projects. Despite the challenging market environment, IIB’s stakeholders and investors have demonstrated their confidence in our strategy that has resulted in IIB earning a net income of US$ 1.7 million during the 3-month period,” Saeed Abdul Jalil Mohammed Al Fahim, Chairman of IIB, said.
“During the current difficult global conditions, the Bank has adopted the strategies of prudent investing, strict liquidity management and capital protection. IIB’s asset position demonstrates core strength with 40% of Total Assets represented by cash and short-term murabaha placements with financially-sound regional banks with a further 7% invested in regional listed equities, giving a total liquidity position of 47%.”
“Our strategy has been to structure and market to clients a range of attractive investment offerings in the manufacturing, financial, energy and real estate sectors in various countries. During 2012, IIB has concluded one investment banking transaction in Bahrain and also purchased shares in a regional quoted company. The Bank’s “pipeline” of potential transactions has enabled the Bank to evaluate several opportunities for possible future launches or direct investment. IIB’s balance sheet continues to be strong, evidenced by the fact that it had no borrowings or off balance sheet commitments during the year,” Aabed Al-Zeera, CEO and Board member, said.