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BMB Investment Bank (BMB) posted a loss of $14.3 million for 2008 as compared to a profit of $24.6 million in 2007.
The majority of this loss came in the fourth quarter as markets continued to deteriorate and the bank took the measure of provisioning some of its private equity investments.
The bank ended the year having reduced leverage from 1.4 at December 31, 2007 to 1.1 at December 31, 2008. As well the bank extended the maturity on $34.7 million of short-term liabilities from 2009 to 2011.
"Along with most other financial institutions across the world, BMB was impacted by the severe market conditions of the year and the global economic downturn," a spokesman said.
"BMB had correctly anticipated in 2007 the impending financial storm. However, it was impossible to predict the unprecedented magnitude and severity of the decline that has taken place," he said.
Losses from foreign exchange totalled $1.6 million as compared to a profit of $1.9 million in 2007. The bank took impairment provisions of $4 million mainly related to its private equity portfolio as compared to $3.5 million in 2007. Total assets stood at $100.5 million at the end of last year as compared to $180.9 million at the end of 2007.
Total shareholder's equity was $43 miilion as compared to $71.4 million at the end of 2007.
Total assets at declined to $100.5 million partly as a result of the bank repaying the outstanding amount of $28.5 million on its syndicated loan as well as the repayment of some bank and client deposits, repos and other borrowings.
Despite this, the bank's Basel II capital adequacy ratio remained robust at 22.8 per cent at the end of last year, only slightly changed from 24 per cent at the end of 2007.
"The year 2008 has certainly been a year of challenges and change," said chairman Wilson Benjamin.
"Despite the difficulties of the past year, BMB enters 2009 with a strong balance sheet which has been tested and successfully proven itself over the years," added chief executive Albert Kittaneh.
"Our capital position is sound and our investment portfolio remains fundamentally strong. While we prudently took provisions and negative fair value adjustments on our private equity portfolio, we firmly believe that these provisions will be recoverable as we realise these assets during the coming years.
