Gulf International Bank (GIB) made a net profit of $41.7 million for the six months of 2016, compared to $47.3 million over the same period last year.

Net income after tax in the second quarter was $31.2 million compared to $20.9 million over the same period last year.

Total income at $151.4 million for the six months was $2.4 million up on the prior year with year-on-year increases recorded in all income categories with the exception of fee and commission income, and foreign exchange income. 

The Bahrain-based GIB said the year-on-year increase in the bank’s core income reflects the successful progress in the implementation of a new business strategy to transform it into a leading pan-GCC universal bank providing innovative customer-centric solutions.

Net interest income at $91.0 million for the six months was $5.4 million or 6 per cent up on the prior year period, reflecting increases in both loan volumes and loan margins as the bank continues to reorientate its lending activities from transactional-based long-term project and structured finance to relationship-based large and mid-cap corporates. 

Fee and commission income at $32.6 million was $6.5 million lower than in the prior year, principally due to a difference in the timing of investment banking fees that are due to arise later in 2016 compared to 2015. 

Foreign exchange income at $9.0 million was $2.8 million lower than in the prior year period. 

Trading income at $4.6 million was $0.2 million up on the prior year period. In addition to revenue derived from customer-related interest rate derivative activities, trading income comprised gains on an investment in a fund managed by the bank’s London-based subsidiary GIB (UK). 

Total expenses at $102.3 million for the six months were $11.3 million or 12 per cent up on the prior year period, attributable to costs associated with new core banking and treasury IT systems infrastructure and the on-going investment in GIB’s new retail banking proposition. 

The provision charge for the first half of the year was $3.9 million being $6.0 million less than the provision charge in the first half of 2016.