Dubai: First Gulf Bank (FGB) reported a net profit of Dh 1.7 billion in the first half of this year, up 12 per cent over the same period in 2009.

The bank’s second quarter profit was up 2 per cent at Dh787 million compared with the same quarter last year.

“FGB has maintained its top line momentum for the second quarter of 2010, consolidating its solid start of the year,” said André Sayegh, Chief Executive Officer, FGB.

In the second quarter of this year the bank reported total revenue of Dh1.46 billion, up 12 per cent compared with the same period last year. While net Interest and Islamic Financing income was up by 9 per cent, the fee income increased 24 per cent.

The core banking business contributed 93 per cent to the net profit while the subsidiaries and associate companies contributed 7 per cent in the second quarter, the bank said in a statement.

Frankfurt: Deutsche Bank AG, Germany's largest bank, said second-quarter profit rose 6.4 per cent, beating analysts' estimates, as gains in retail and transaction banking helped offset a decline in sales and trading.

Deutsche Bank rose as much as 3.6 per cent in Frankfurt trading after saying net income increased to 1.16 billion euros (Dh5.6 billion), surpassing the 1.05 billion-euro median estimate of analysts surveyed by Bloomberg.

Sales and trading at the investment bank, run by Anshu Jain, fell 15 per cent from a year earlier and 42 per cent from the first quarter, tracking declines at competitors including Credit Suisse Group AG and Goldman Sachs Group. The so-called stable businesses of global transaction banking, consumer banking and asset and wealth management posted their highest combined pretax profit in two years.

"The stable businesses made very pleasant progress in the second quarter," said Manfred Jakob, an analyst at SEB AG in Frankfurt. "The slump in trading is largely due to the euro crisis."

Deutsche Bank was up 1.9 per cent to 51.34 euros by 9.18am in Frankfurt. UBS AG, Switzerland's biggest bank, rose as much as 7.6 per cent in Swiss trading after reporting a third consecutive quarterly profit, beating analysts' estimates on higher-than-expected trading revenue.

Earnings from Deutsche Bank's retail unit rose more than four-fold to 233 million euros, the most since the collapse of Lehman Brothers Holdings in 2008, helped by mortgage lending and a decline in loan defaults.

Pretax profit from transaction banking more than doubled to 478 million euros.

Positive outlook

• 1.16b: Deutche Bank's quarterly net income (in euros)
• 7.6%: Rise in UBS in Swiss trading

Kuwait: Gulf Bank expects to boost its profits in the third quarter and sees 2011 as a year of recovery, as the lender leaves its aggressive provisioning policy behind it, Chief Executive Michel Accad said.

Gulf Bank, which was rescued by the Kuwaiti central bank in 2008, after about 260 million dinars (Dh3.3 billion) of derivatives losses, is completely provisioned against bad loans and on track for a comeback, Accad said.

The bank's troubles prompted the government to guarantee all deposits in local banks to restore confidence.

Accad said in an interview yesterday that the fourth largest Kuwaiti bank by market value had made it out of "intensive care" in 2009 from the derivatives trauma.

"I think I'm going out of [the] hospital from the end of the second quarter, because now we have shown our first profit," Accad said.

The bank, booked 85 million dinars in provisions against bad loans in the first half, clearing the way for lower provisions, he said.

Kuwait's central bank has imposed a strict provisioning policy on local lenders since the outbreak of the financial crisis to protect the banking sector, in addition to specific provisions that each bank might need to book against bad loans or investments.

Manama: Gulf International Bank reported a consolidated net income after tax of $56.3 million (Dh206.7 million) for the six months ended June 30, compared to a loss of $22.5 million in the comparable period of 2009.

Net income after tax in the second quarter was $29.5 million, a 10 per cent increase over the first quarter profit.

At the operating level, GIB reported consolidated operating income of $63.5 million. Operating income in the second quarter of $32.9 million was eight per cent up on the first quarter.

Net interest income, which at $87.3 million for the six months represents the bank's principal income source, was 23 per cent down on the prior year period.

Low levels

The year-on-year decrease was attributable to the deleveraging and derisking of the balance sheet and the prevailing historically low level of interest rates. Net interest income in the second quarter, amounting to $44.1 million, was nevertheless slightly up on the first quarter.

Fee-related income at $16.9 million was 14 per cent lower than in the prior year period due to a lower level of investment banking fees. This reflected a subdued level of corporate finance-related activity in the region due to the prevailing volatile market environment.

GIB has nonetheless recently been appointed financial adviser, lead manager and co-underwriter for the upcoming IPO of Abdullah Abdul Mohsin Al Khodari Sons Company in Saudi Arabia.

Proactive measures

Total expenses at $50.7 million for the six months were $9.6 million or 16 per cent down on the prior year period.

The significant year-on-year decrease in expenses reflected proactive measures taken in 2009 to align the cost base with the bank's business model.

A net provision charge of only $4.0 million was recorded for the period.

The limited provisioning requirement reflected the prudent and conservative provisioning actions taken by the bank in 2009.

Consolidated total assets in the half year were $15.8 billion.

The asset profile at June 30, 2010, reflected a high level of liquidity that is being maintained as a precautionary measure in the prevailing stressed and volatile market environment.

Burgan Bank, among the youngest and most dynamic banks in Kuwait and the region, has achieved the most recognized certification for effectively implementing and maintaining an Information Security Management System for its Information Technology and IT Security related operations.

This Certificate is an affirmation that Burgan Bank adopts a successful design and implementation of an Information Security Management System (ISMS) in accordance with ISO/IEC 27001:2005.

Burgan Bank ISMS practices have been audited and verified by Bureau VERITAS, a leading organization in the field of auditing management systems and processes.

This prestigious professional certificate verifies that all operations at Burgan Bank adhere to the specific requirements for establishing, implementing, operating, monitoring, reviewing, maintaining and improving an Information Security Management System within the context of the Banks' overall information risk management practices.

It also asserts that requirements for the implementation of security controls are customized to the needs of ensuring the highest levels of security controls for each and every relevant department in the Bank.

On receiving the certification, the Acting Chief General Manager of Burgan Bank, Mr. Khalid Al Zouman commented by saying: "I was confident that this certification is forthcoming. My conviction is based on the fact that we have complete trust in our information security system coupled with our complete confidence in the dedication of our staff. The effort in ensuring that all our systems and processes are matured on an ongoing basis can be witnessed."

Mr. Madhusudan Rao, Senior General Manager - Risk, said "We are proud about our proactive investments in building a successful and best-in-class information security management system which leads to an increased protection of our customer information. We keep challenging ourselves so as to ensure continuous improvement of our management systems"

"The ISO 27001 certification is a clear indication of the strength of our investments in people, process and technology for enhancing the customer experience by improving the information security" he added

Mr. Satish Mane, General Manager - Operational Risk Officer, said: "Bank has deployed a comprehensive risk assessment and management framework to effectively identify and manage the risks; which is a key function in ensuring that the right controls are identified and implemented for information protection. In addition, a certified team of ISO 27001 internal auditors periodically assess the effectiveness of the risk mitigation controls implemented in the bank."

"A successful implementation of the ISMS reduces the IT related operational risks, builds confidence in the stakeholders, demonstrate increased protection of the information and increases the trust between the bank and the customers" he added.

Burgan Bank addresses this certification as another milestone in its journey towards providing adequate, secure and valuable services to its customers.

According to stock exchange data, Saudi lenders SABB and Riyad have raised provisions for loan losses significantly during the second quarter, following defaults by some local firms, Reuters has reported. Riyad raised provisions for loan losses by 105.4% to SR196.2m during the second quarter while SABB booked SR504m for the same purpose, more than 60% above the year-earlier period, the data showed.

Qatar National Bank (QNB) has announced it has received approval from the Central Bank of Lebanon to open a full service branch in the country. QNB's Lebanon branch will provide a full range of retail and corporate banking services. The new branch extends the lender's international reach to cover 24 countries across Europe, Asia and Africa

The National Bank of Abu Dhabi (NBAD) has reported 10.4% rise in Q2 net profit to Dhs1bn compared to Dhs908m a year earlier. Net income for the first half of this year rose 21.1% to Dhs2.03bn from Dhs1.68bn achieved a year ago. The lender continued to maintain collective provision of Dhs1.685bn at 1.25% of credit risk weighted assets. As at 30 June 2010, non-performing loans were 147% covered and specific provision cover was at 66%, NBAD said.

Kuwaiti investment firm, International Investment Group (IIG), has said it is unable to pay $152.5m to sukuk holders who demanded immediate repayment after the company defaulted on its $200m Islamic bond, Bloomberg has reported. In April, IIG became the second Kuwait-based firm in a year to miss a sukuk payment.

Dubai: Emirates NBD is in the process of raising $250 million (Dh919.5 million) from international financial markets through auto loan securitisation.

"This is the first of its kind securitisation deal in the region where we are bundling our auto loan portfolio to raise funds at internationally competitive rates. The securitisation deals form part of our efforts to augment our medium term funding," Rick Pudner, Chief Executive Officer of Emirates NBD, said yesterday.

The bank expects to complete the deal by mid-August. The bank officials said yesterday that the funding remains stable and the bank's deposit mobilisation initiative proved successful with the loans to deposit ratio improving 118 per cent at the end of 2009 to 103 per cent at the end of the second quarter of 2010.

The bank is also expected to raise funds through a strategic sale of a minority stake in its cards processing unit Network International. The bank has been in talks with potential investors. "We expect the deal to be completed in next 3 to 4 months."

Pudner said that while the wholesale funding remains challenging in the medium term, the bank is comfortable in its liquidity position with unused facilities Dh27.8 billion and net liquid assets of Dh18.7 billion at its disposal.

Overall, the bank officials said the bank's term debt maturity profile is with in its funding capacity. While customer deposits represent 79 per cent of its total liabilities, wholesale debt was about 8 per cent of liabilities. Out of the Dh7.5 billion debts maturing this year, the bank has brought down the debt outstanding to Dh5.7 billion at the end of second half.

The bank on Monday confirmed the appontment of Surya Subramanian, a former Standard Chartered banker, as its new chief financial officer.