Gulf Finance House (GFH) today announced record results for the fiscal year ending December 31 2005 with a consolidated net profit of US$ 140 million compared to US$ 57 million for 2004, an overall increase of 147 per cent. The Bank’s results provided a return on equity of 47 per cent (2004 - 32 per cent).
Announcing the results at a press conference held at the Bahrain Financial Harbour, Dr. Fuad Al-Omar, Chairman of GFH, said that the results reflected the success of the Bank’s investment strategy, which is based on a unique understanding of the changes underway in the region’s economies and local markets. GFH seeks to capitalize on the opportunities for investment in infrastructure and private investments that are coming from these historic changes. On the back of these excellent results, the Board of Directors has recommended a record total dividend of 60 per cent – 48 per cent in cash and 12 per cent in shares.
Commenting on the results, Dr. Al-Omar said: “The 2005 results firmly establish GFH as one of the premier investment banks in the region and demonstrate why GFH was awarded the title “Best Investment Bank in the GCC” in 2005 by Bankers Middle East and “The Outstanding Islamic Financial Institution” by Kuala Lumpur-based International Institute of Islamic Finance Inc (IIIF Inc).
In line with the Bank’s strategy of widening the shareholder base, GFH is in the advanced stages of listing its shares on other financial markets in the region. The Bank is currently listed on the Bahrain and Kuwait stock exchanges, where its stock is actively traded.
“We achieved many milestones in 2005 and in recognition of the bank’s strong growth, the Board recently recommended an increase in the Bank’s paid up capital by 30 per cent to support GFH’s expansion strategy. The increase in capital will be presented to the shareholders at the general meeting to be held on February 19 2006.”
Reviewing developments in the bank’s portfolio of major projects, Dr. Fuad commented, “The latest major project in our investment portfolio - Energy City-Qatar - was launched successfully last year and was oversubscribed with GFH raising over the required US$ 276 million in equity in record time, underlining the strength of the bank’s fundraising capability which also reflects the trust investors have vested in us.”
Mr. Esam Janahi, Chief Executive Officer and Board Member of GFH said: “2005 was the most important year so far in the bank’s history. Most pleasing was the achievement of positive returns for our clients in all our exits. The exits of Bahrain Financial Harbour Inc. and Gulf Coffee House provided our clients with returns ranging from 50 -65 per cent over investment time frames of two to three years.
“We also launched a number of new investment vehicles last year which together raised funds of more than US$1.4 billion. These included Al Basha’er Equity Fund, Pan-European Real Estate Fund, Energy City - Qatar, Gulf Holding Company and Bayan Holding Company. Through Bayan Holding & Gulf Holding, which are pre-IPO deals, our investors now have the opportunity to invest in development projects, which will have the added benefit of being listed.” he added.
“We are confident that we can build on our achievements so far. We believe that 2006 will be another good year for the GCC and MENA economies. This positive outlook will continue to yield excellent new opportunities for our business. We also believe that good opportunities can be found outside the region and we will pursue these too,” Mr. Janahi said.
He said the 2005 full-year results also reflected the excellent performance of the Bank’s commercial banking subsidiary, GFH Commercial Bank, which posted a net profit of US$ 11 million in its first full-year of operations. The launch of Amlak, Eqarat Al Khaleej and Al Hareth French Property Fund contributed to this result. It also played an instrumental role in the launch and success of the Al Marfa’a Al Mali Sukuk for BFH.
“GFH is at a crucial stage of its expansion and growth. We will continue to build the Bank’s institutional capacity by investing in our human capital and our technology. In 2005, we recruited more professionals for key areas of our business including real estate development, asset management, risk management, corporate affairs, private equity, compliance, HR and economic research. We also developed a new human resources strategy to ensure that working with GFH is a rewarding experience,” Mr. Janahi added.
Gulf Finance House B.S.C
Established six years ago, Gulf Finance House B.S.C (GFH) has rapidly earned a reputation as a leader in Islamic banking. GFH has paid-up share capital of US$150 million and authorized capital of US$300 million. The Bank’s commitment to the Islamic Shari'a philosophy of wealth management directs its innovation and shapes the structure of its investment products. GFH is dedicated to providing clients with carefully selected investment opportunities that balance risk with reward. It leads the drive to establish an Islamic investment banking industry that merges with regional development. Consequently, since its inception, GFH has striven to offer investment opportunities in the countries where it operates so as to further their economic and social development. It aims to capitalise on the increasing willingness of Islamic investors to back local and regional business projects and opportunities and to take advantage of the wave of reforms initiated by GCC governments to diversify and liberalise their economies. This is balanced by enabling clients to diversify risk by offering them investment opportunities outside the region. This philosophy is reflected in GFH’s investment portfolio that includes major projects such as the US$1.3 billion Bahrain Financial Harbour, Al Areen , the US$3.8 billion Legends in Dubailand and the US$1 billion Royal Metropolis in the Kingdom of Jordan. The latest in the portfolio of GFH investments is Energy City-Qatar, a multi-billion dollar energy business centre which will be developed into a regional nerve centre of the industry. GFH’s investments also include Lebanon’s Arab Finance House; Bahrain’s Royal University for Women; and the regional budget airline, MenaJet.
