Gulf Finance House (“GFH” or “the bank”) has announced today the financial results for the quarter ending 31st March, 2011 reporting a net profit of US$ 11.9 million as compared to US$ 7.5 million loss for the same period last year.
The comprehensive plan for the period ending 31st March 2011 included major reduction in operational costs where total expenses of the bank were reduced by almost 50% from US$ 25.9 million to US$ 14.5 million, primarily because of stringent cost cutting measures coupled with aggressive debt restructurings undertaken by the bank. Total income for the period was US$ 26.4 million which primarily included the reversal of GFH's reward to employees that was granted in the form of Balexco shares as a bonus scheme in 2008. These shares have now been reversed in addition to the recognition of the dividends of the Bank’s holding in Balexco.
GFH has been going through a complete restructuring plan since 2010. The bank has achieved successful exits last year from a number of investment including Bahrain Financial Harbour, Qinvest and Saudi Real Estate Company realizing approximately US$ 300 million in cash and assets. In addition to this, the bank has launched a convertible Murabaha aimed at raising up to US$500 million of new capital. Interests in the Murabaha can be converted by investors into shares in GFH at the option of the investor. This capital increase is well under way, with over US$ 120 million received already from investors, clearly showing their confidence in the bank’s future. The bank expects continued interest from shareholders and investors’ throughout 2011 to further support its business growth and strengthen its position in the market.
Esam Yousif Janahi, Executive Chairman of GFH commented on the steps taken by GFH, saying: “We accept that we have had a tough two years as a result of the global financial crisis, but we have had around 10 good years before that where we built our reputation and an impressive track record in creating Islamic financial institutions and pioneering a series of infrastructure projects that aim to fill the growth gap in developing economies.
He continued: “GFH has achieved excellent results in the past and has been focused on returning to profitability together with the long term view and support of our shareholders and investors, as well as the dedication of our management team. Looking ahead, our new business model is designed to enable us to make the most out of the available opportunities and the current market situation; we will be using our expertise and excellent track record to create more financial institutions ensuring a steady and continuous income stream from management fees and on our proprietary investments. Also, as part of this new business model we will be looking at new projects serving the economical needs in certain economies, while being fully committed to the completion of our existing projects and achieving profitable client exits. We highly appreciate our shareholders and investors’ confidence and support during the difficult times which is now behind us and predict to reward this confidence even further in the coming quarters as we expect to announce positive updates soon”.