(MENAFN Press) International Investment Bank (IIB), a globally focused investment bank based in the Kingdom of Bahrain operating in line with Shariah principles, today announced its results for the three months ended 31 March 2009.
Total Income for the first quarter was US 1.8 million, mainly derived from investment banking fees generated from the structuring, underwriting and placement of new investments, together with profit earned on funds placed with financial institutions. Total Expenses reduced to US 2.7 million in the period, reflecting the lower business activity as compared to a year ago. A Net Loss was incurred of US 0.9 million compared to a Net Profit of US 5.4 million earned in the same period of 2008. The decrease is mainly attributed to fewer investment banking transactions and lower profit rates applicable to bank placements as the Bank intentionally slowed down its investment activities as a measure of prudence during the current turbulent market situation.
Total Assets at 31 March 2009 were US 198.5 million compared to US 218.7 million at year end 2008. The decrease principally arises from the payment in 2009 of the 2008 dividend and fair value write downs on several available for sale investments.
Capital Adequacy Ratio was 86% as at 31 March 2009 versus the Central Bank of Bahrains minimum requirement of 12%, demonstrating IIBs capacity to significantly increase its investment portfolio in the future from a regulatory capital perspective.
Commenting on the Bank's results, his Excellency Mr. Saeed Abdul Jalil Mohammed Al Fahim, Chairman of IIB, said: Trading conditions in 2009 are very challenging for investment banks for two principal reasons. Many investors have incurred significant losses during the past 12 months on their regional and global portfolios and have been reluctant to commit to making new investments. However, we foresee an improvement in investors sentiment during the second half of this year. Secondly, many regional banks have suspended the provision of Shariah-compliant financing of real estate development and private equity projects. During the current difficult global conditions, the Bank has adopted the strategies of prudent investing, strict liquidity management and capital protection. IIBs asset position demonstrates core strength with 52% of Total Assets represented by cash and short-dated murabaha placements with financially-sound regional banks with a further 15% invested in regional listed equities, giving a total liquidity position of 67%.
Commenting on the 2009 results, Mr. Aabed Al-Zeera, CEO and Board member said: 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 2009, IIB has concluded the sell down of its investment in a sugar refinery to be built in the Kingdom of Bahrain. The Banks pipeline of potential transactions continues to be strong and several deals are being evaluated for product launches expected later in the year. Due to the cyclical nature of the Banks operations whereby revenues are closely linked to completed investment transactions, the performance in the first quarter is not reflective of the expected outcome for the remainder of 2009. IIBs balance sheet is strong, evidenced by the fact that it had no borrowings, off balance sheet commitments nor other exposures during the year.