based Gulf International Bank (GIB) recorded consolidated net income after tax of $104.5 million, an increase of $4.1 million or 4 percent against last year. Net income after tax in the fourth quarter was $19.9 million compared to $14.3 million in the fourth quarter of 2010. Year-on-year increases were recorded in all income categories, with the exception of net interest income. Net interest income, which at $143.8 million represented the bank's principal income source, was 8 percent down on 2010. The year-on-year decrease was attributable to a lower average loan volume associated with ongoing derisking initiatives, and an increase in the cost of term finance as a result of proactive actions taken to minimize the mismatch in the maturity profile of the Bank's assets and liabilities. Dr. Yahya bin Abdullah Alyahya, GIB's Chief Executive Officer, said: "We are delighted to report continued profitability growth in 2011 despite ongoing initiatives to derisk the wholesale lending portfolio and improve the funding profile of the Bank, while at the same time investing in the future of the Bank through new strategic initiatives. GIB's robust funding position during 2011 reflected the confidence the bank's customers and counterparties have in its strong ownership and financial strength. GIB raised $900 million of new term finance during the year, thereby successfully reducing the bank's reliance on short-term wholesale funding. Of particular note, during 2011 GIB successfully issued its first ever Shariah-compliant term finance facility, a $300 million Sukuk-al-Murabaha private placement." Dr. Alyahya continued: "Underscoring GIB's financial performance was the re-affirmation of the bank's long-term issuer ratings by Fitch, Moody's and Standard & Poor's. The agencies noted GIB's strong ownership and capitalization, improved liquidity, and conservative provisioning. Such recognition constitutes a positive independent endorsement.”
