The Bahrain-based TAIB Bank reported a loss of $6.6 million for the first six months of 2002. "The decline in market valuations of our trading portfolio from continued depressed market conditions, as well as the slow down in the private equity markets, have resulted in our first ever half-year loss", said Iqbal Mamdani, the bank vice chairman and CEO.
”The total of the Bank’s investments in fixed income instruments and in TAIB Funds within the trading portfolio constitutes seven percent of the total assets of the bank as at June 30, 2002. Within this portfolio, our investment in TAIB Funds—mostly managed by outside fund managers—suffered a loss of approximately $3.5 million,“ Mamdani added.
“Likewise on our investment in AAA rated fixed income instruments within the trading portfolio, we suffered valuation losses of about four million dollars. Thus in the trading portfolio, our losses aggregated eight million dollars in the first six months of 2002, mainly stemming from marking to market valuation of the fixed income instruments and the Funds.”
He concluded “We could not avoid the situation, despite four TAIB Funds outperforming their benchmark indices and despite the heavy cash flows received by the bank from the fixed income instruments during the current year".
On the positive side, despite the depressed market conditions, the bank’s fee based income increased by 23 percent to $2.3 million compared to $1.9 million for the same period last year, mainly due to successful acquisitions of a US property and two UK properties. The Bank also exited from three real estate investments in the UK. Total operating costs, on the other hand, were tightly controlled and 12 percent lower, as compared to same period last year.
The bank expects to exit from at least two or three private equity investments, and two real estate investments in the United States, during the remaining period of 2002, in addition to acquiring at least two more properties each in the United Kingdom and United States respectively. "These transactions would help us in correcting the position", Mamdani added.
"Traditionally investment banks conclude most of their deals in third and fourth quarters, therefore, any interim result is not necessarily an indication of annual performance" concluded Mamdani.
TAIB Bank is an international Investment Bank conducting its activities in the United States of America, the United Kingdom and in the regional markets of the Gulf Cooperation Council (GCC), the Indian sub-continent, Turkey and Central Asia.
TAIB Bank E.C. is a public company listed on the Bahrain Stock Exchange. Established in 1979 and headquartered in Bahrain, TAIB has built a worldwide network of eight offices in six countries. — (menareport.com)
© 2002 Mena Report (www.menareport.com)
