Increased letter of credit (L/C) and guarantee business have contributed to an 18 per cent increase in profits in the nine months to 30 Septembercompared with the same period in 2005 at Gulf International Bank (GIB).

The bankreported consolidated net income after tax of US$193.3 million for the nine months ended 30 September 2006, representing a US$28.9 million increase on the same period last year.

Advance explained

The Bahrain-based bank says the year-on-year advance reflects increases in both interest and non-interest earnings, a decrease in expenses and a lower level of provisions for credit losses.

In particular, GIBreports a strong advance in interest earnings generated by the Bank's GCC lending activities as a result of significantly higher loan volumes. The bank says the increase in loan volumes has been driven by the ongoing development of the bank's project finance and specialised lending activities.

Trade finance results

Trade finance related activities at GIB appear to be growing strongly too.

Commissions on L/Cs and guarantees were 35 per cent up in the first three quarters of 2006 compared with the same period last year, which the bank says reflects a positive growth momentum in GCC-related activities.

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