At their meeting on Friday, 13th February 2015, the Board of Directors of Gulf International Bank B.S.C. (GIB or the Bank) approved the consolidated financial statements for the year ended 31st December 2014.
GIB recorded consolidated net income after tax of $85.6 million for the year ended 31st December 2014, compared to $121.5 million in the prior year. However, prior year income included two exceptional, one-off income items amounting to $21.2 million. Excluding these exceptional income items, net income was $14.7 million lower than the prior year principally due to a $13.3 million year-on-year increase in operating expenses. The increase in expenses was attributable to the investment in the implementation of the new GCC-focused universal banking strategy and, in particular, the new retail bank which was launched for customers in the Kingdom of Saudi Arabia under the brand name ‘meem’ in January 2015. Net income after tax in the fourth quarter was $12.9 million compared to $20.0 million in the fourth quarter of 2013.
GIB’s Chairman Jammaz bin Abdullah Al-Suhaimi, commented "I am pleased to report that we made excellent progress during the year in implementing our business strategy to transform GIB into a leading pan-GCC universal bank providing innovative customer-centric solutions."
Al-Suhaimi concluded "Based on our significant achievements in 2014, we are optimistic about GIB’s prospects for next year. We have put in place solid foundations through which to support our strategic objectives to grow and develop the business across the GCC region. GIB is strongly positioned to face all future challenges, and the Board has every confidence in the Bank’s management to continue implementing our new strategy and achieve our ambitious business goals."
Dr. Yahya bin Abdullah Alyahya, GIB’s Chief Executive Officer stated "As we predicted last year, the dilution of profitability in 2014 arises from the substantial investment in establishing a new retail bank as part of our pan-GCC universal banking strategy, and will continue through to the expected break-even of the retail bank in 2018. In addition, the Bank’s initiatives to minimise the mismatch in the asset and liability maturity profile, and proactive preparations for future growth in the core corporate loan portfolio resulted in the raising of additional term finance during 2014, which has had an impact on profitability in the short-term. However, term finance will no longer be required once more stable funding is provided by retail deposits generated by the new retail bank, thereby contributing to an improvement in profitability in the medium- to long-term."