Global Arab Network | Bahrain-based Gulf Finance House: Net loss of US$ 728 million in 2009

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Bahrain-based Gulf Finance House: Net loss of US$ 728 million in 2009

Global Arab Network - - Rabih Serrai

Sunday, 14 February 2010 20:09

Gulf Finance House, announced today that it has made a net loss of US$728m in 2009, of which US$ 656 million were non cash provisions, compared to a profit of US$292m in 2008. This represents a decrease of 350% from the previous year. Operating loss in the fourth quarter of 2009 amounted to US$607 million compared to US$11 million in the previous year. Total non – cash provisions during the fourth quarter amounted to US$ 575 million.

Gulf Finance House Chairman Dr. Esam Janahi commented today saying “While 2009 proved challenging, it is important to view our results in the context of what prudently managed banks must do in tough economic times. We have closely reviewed all of our assets, made provisions where appropriate and have also begun to dispose of those which are non-core. We have asked management to review our cost base and also to ensure that we have a strategy to grow revenues. It is my strong view that as we achieve these objectives GFH will return to profitability and I am personally focused on this objective.”

Acting CEO Mr. Ted Pretty added “2009 was a year which presented unprecedented challenges to banks in both the global and GCC markets. All institutions have been impacted by declining asset values and by the tightness in liquidity.

However, our underlying operating results improved with GFH recording a slightly lower loss in Q4 but a bigger improvement is expected in Q1 2010 and each following quarter. We successfully refinanced $100m with the WestLB syndicate after paying down $200m when due on February 10th. We have taken such provisions as have been needed to reflect market values and to reposition our business. We now have a smaller but much healthier balance sheet.

Our priorities at GFH are now very simple namely to grow revenue, to substantially reduce our costs, continue to improve our liquidity position and provide exits for our investors from existing products. “

Established in 1999, Bahrain based Gulf Finance House (GFH) is one of the most successful and innovative Islamic investment banks in the Middle East. GFH historically focused on the conception and delivery of high value economic infrastructure projects. The Bank has also offered a diversified product range with a number of venture capital, private equity and asset management initiatives in addition to pioneering a number of Islamic financial institutions.

In addition to its share listings on the Kuwait and Bahraini Stock Exchange’s and the Dubai Financial Market, 2007 witnessed the Bank’s GDR listing on the London Stock Exchange. Over the past year, GFH has evolved its business model with a view to establishing itself as the world’s leading Islamic investment bank. Under this new structure GFH will essentially operate with two primary businesses, GFH Real Estate & Infrastructure and GFH Capital.

The Bank has won numerous local and international awards as a testimony of its commitment to excellence and its pioneering and innovative approach, including “Best Investment Bank 2008”, by Islamic Banking and Finance, “Best Investment Bank” three years running (2005-2007), awarded by Banker Middle East; “Best Islamic Investment Bank” by World Finance 2007; “MENA Investment Bank of the Year 2008” by Acquisitions Monthly; “Best Investment Bank 2008”, by Islamic Banking and Finance; and “Best Islamic Finance House” at the Banker Middle East Industry Awards 2009.

Global Arab Network

Extracted from "Corporate release"

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