Markets & Finance

Gulf African Bank records 41 per cent profit growth

gulf

Gulf African Bank on Kenyatta Avenue in Nairobi. PHOTO | FILE |

Shariah-compliant lender Gulf African Bank (GAB) has recorded a 41 per cent growth in profits after tax, riding on improved operating efficiencies.

The bank reported an after-tax profit of Sh402 million up from Sh285 million a year earlier.

It booked an additional Sh3 billion in loans to expand its loan book to Sh13.7 billion.

The growth, however, saw its capital ratios fall below the new requirements, which calls for injection of additional funds in the business.

Gulf’s total capital-to-total weighted loan book was 13.5 per cent compared to the new statutory requirement of 14.5 per cent.

Its core capital ratios are compliant indicating it has the option of using debt or shareholder’s funds to meet the adequacy levels.

Gulf African was the first exclusive Shariah-compliant bank to be launched in Kenya in 2008 but has since had to contend with increased competition as more banks opened Islamic business departments to diversify their income and tap into the previously financially excluded Muslim community.

The bank opened a Shariah-compliant insurance brokerage GAB Takaful Insurance Agency Limited last year as it sought to diversify its income streams.

Shareholders of the bank include Istithmar World, the investment arm of Dubai Government, Bank Muscat International, a bank headquartered in Bahrain, an investor from Saudi Arabia named Sheikh Abdullah Mohammed Al Romaizan and PTA Bank.