For Immediate Release					JULY 28, 2002

TAIB BANK ANNOUNCES FIRST SIX MONTH 2002 RESULTS

Bahrain-based TAIB Bank E.C has reported a loss of US$ 6.6 million for the first six months of 2002, as against a net profit of US$ 0.5 million for the first quarter of this year. 

"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 Mr Iqbal G. Mamdani, Vice Chairman and CEO of the Bank."We are disappointed with the results", he added, "but have taken active steps to achieve profitability in the second half of the year".

"The total of the Bank’s investments in fixed income instruments and in TAIB Funds within the trading portfolio constitutes 7% of the total assets of the Bank as at 30th June 2002. Within this portfolio, our investment in TAIB Funds (mostly managed by outside fund managers) suffered a loss of approx. US$ 3.5 million. Likewise on our investment in AAA rated fixed income instruments within the trading portfolio, we suffered valuation losses of about US$ 4 million. Thus in the trading portfolio, our losses aggregated US$ 8 million in the first 6 months of 2002, mainly stemming from marking to market valuation of the fixed income instruments and the Funds. We could not avoid the situation, despite 4 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% to US$2.3 million compared to US$1.9 million for the same period last year, mainly due to successful acquisitions of a US property and 2 UK properties; the Bank also successfully exited from 3 real estate investments in the UK. Total operating costs, on the other hand, were tightly controlled and 12% lower, as compared to same period last year. 

The Bank expects to exit from at least two or three private equity investments, and 2 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", Mr 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 Mr. Mamdani.

TAIB Bank E.C. an international Investment Bank based in Bahrain and listed on the Bahrain Stock Exchange, conducts its activities in the United States of America, the United Kingdom and in the regional markets of the Gulf, the Indian sub-continent, Turkey and Central Asia.


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