Total Income for the third quarter of 2009 was $1.3 million, mainly derived from investment banking fees generated from the structuring, underwriting and placement of new investments, together with profit earned on Murabaha funds placed with financial institutions and corporate clients.
Total Expenses reduced to $1.9 million in the period, reflecting the lower business activity as compared to the third quarter of 2008. The bank incurred a net loss of $0.6 million compared to a net income of $ 0.8 million earned in the same period of 2008. The lower net income is attributed mainly to fewer investment banking transactions as the bank has intentionally scaled down its investment activities as a measure of prudence in the current market situation and lower profit rates applicable to bank placements.
The net loss for the nine month period was $2 million compared with net income of $12 million for the same period last year.
Total Assets at 30 September 2009 are $191.4 million compared to $218.7 million at year end 2008. The decrease arises following the payment in 2009 of the 2008 cash dividend of seven per cent and fair value write downs on several available for sale investments.
Capital Adequacy Ratio was 64 per cent as at 30 September 2009 which is more than five times the Central Bank of Bahrain's minimum requirement of 12 per cent, demonstrating IIB's 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 the third quarter of 2009 continued to be very challenging for investment banks. We have seen some positive indicators concerning investors' confidence and availability of funding but do not expect a significant improvement in market conditions until the first quarter of 2010. Meanwhile, the Bank has continued its strategy during the third quarter of 2009 of investing in selective opportunities and managing its liquidity. IIB's asset position demonstrates strength with 43 per cent of Total Assets at 30 September 2009 represented by cash, bank balances and short-dated Murabaha placements with financially-sound regional banks plus a further nine per cent invested in regional listed equities, giving a total liquidity position of 52 per cent."
"The bank has no "Banks Borrowings" thus is not under any liquidity pressure," Al Fahim added.
Referring to the results, Aabed Al-Zeera, CEO and Board Member said, "Since inception of the bank, 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 the third quarter of 2009, work has commenced on IIB's recently acquired project to develop a state-of-the-art "commercial" real estate complex in Bosnia and Herzegovina and a well positioned "residential" project in Saudi Arabia. In addition, several deals have been evaluated for product launches expected in early 2010. IIB's balance sheet is strong, evidenced by no borrowings or off balance sheet commitments."