Fimbank has toned down the “fragile optimism” expressed earlier this year, saying it was now framed within a “weaker international trade scenario”.

In its interim results for the period between July 1 and last week, it said that 2014 was coming to a close against a background of toned down global growth projections, in the large part caused by prolonged geo-political tensions.

“The Russia/Ukraine crisis and instability in the Middle East, extending also to parts of North Africa, continue to increase economic uncertainty and heighten downside risk to global trade.

“Falling commodity prices, particularly in food, metals and oil, have been negatively impacting the exports and revenues of commodity exporters and ultimately worsening the terms of trade,” the bank said in a company announcement.

Although operating results in the main component entities and some of the associated factoring entities have been healthy, with interest spread and fee income improving over the same period in 2013, new impairments continue to impact the performance of several entities across the group.

“Besides, recovery efforts with regard to existing problem cases have so far not yielded positive results making the aggregate impairment situation materially challenging. Consequently, the outlook for the performance for the rest of the year is difficult and negative. In this environment, the group is encouraged by the continued trust of its shareholders, in particular its reference institutional shareholders Burgan Bank SAK and United Gulf Bank BSC, as demonstrated in last summer’s Rights Issue which raised $48 million of new equity. This support will allow the group to weather these setbacks and absorb some of the shocks in the process,” it said.