BMB Investment Bank (“BMB”) announced today the second best financial results in the Bank’s history with 2006 earnings surging 243% to US$21.11 million as compared to US$6.16 million in 2005.
The main highlights of the year’s performance are as follows:
• Net income rose 243% from US$6.16 million in 2005 to US$21.11 million in 2006
• Income from investments amounted to US$27.19 million compared to US$26.93 million in 2005
• Income from foreign exchange translation was US$6.06 million, a significant increase over the loss of US$5.32 million in 2005
• Total assets grew to US$172.67 million at 31 December 2006 from US$168.41 million at 31 December 2005
• Capital adequacy ratio increased to 20.22% in 2006 from 13.25% in 2005
Increase in net income
Net income for the year amounted to US$21.11 million, an increase of 243% from US$6.16 million in 2005. The Bank’s income continues to be driven primarily by its core private equity business as evidenced by income from investments which came in at US$27.19 million in 2006 as compared to US$26.93 million in 2005.
Increase in foreign exchange profit
The Bank recorded US$6.06 million in foreign exchange translation gains for 2006 as compared to a US$5.32 million loss for 2005.
The Bank’s foreign exchange earnings remain subject to volatility due to insufficient foreign exchange trading lines to hedge non-US dollar denominated assets. The Bank has made significant progress in this area by securing certain foreign exchange trading facilities in 2006 and expects to obtain additional such lines during the course of 2007.
Other income
Other income increased to US$4.45 million as compared to US$2.54 million in 2005, an increase of US$1.91 million, or 75%, mainly as a result of fees from the Bank’s placement of several private equity investments with its customer base as well as an increase in performance fees generated from the realization of customer investments.
Increase in total assets and shareholders’ equity
Total assets at 31 December 2006 were US$172.67 million compared to US$168.41 million at 31 December 2005, an increase of US$4.26 million or 3%. Shareholders’ equity increased by over 70% from US$27.25 million in 2005 to US$46.43 million in 2006 due to internally generated funds. The Bank’s capital adequacy ratio rose to 20.2% from 13.3% at the end of 2005.
Other developments in 2006:
• Strengthening the Bank’s marketing efforts by increasing the size of the marketing team and developing new product offerings.
• Significant progress was made in restoring counterparty trading facilities and establishing new foreign exchange trading lines.
• Further reducing the refinanced US$75 million medium term facility, leading to a cumulative 42% reduction in this borrowing.
In commenting on the results the Bank’s Chairman, Mr. Wilson Benjamin, said:
“2006 was a tremendous year for BMB as we continued to work hard at rebuilding our franchise and securing our future prosperity. We are extremely gratified by our superior financial performance as well as the excellent strides we have made in reestablishing the confidence of the public and the financial community in the Bank.”
Albert I. Kittaneh, Chief Executive, said:
“Throughout the difficulties and challenges of the past few years we have maintained our focus and remained determined not to lose sight of our long-term strategic plan. Our confidence has clearly paid off and we are extremely gratified by our performance. We eagerly look forward to the coming year as we continue to strengthen our product offering and customer base as well as our placement capability.”
The Bank’s full year financials are available at the Bank’s web site at www.bmb.com.bh.
Bahrain Middle East Bank (BSC) was established as an Offshore Banking Unit in 1982. The Bank’s shares are listed on the Bahrain Stock Exchange under (BMEB.BH) and are held by shareholders primarily across the GCC.
