Gulf Finance House (GFH) has reported an excellent start to fiscal 2006. Net profit for the first quarter rose by 75 per cent to US$57 million compared to US$33 million in the corresponding period for 2005.
Announcing the results, Dr. Fuad Al-Omar, Chairman of GFH, said: “This impressive financial performance continues the trend of record growth and profitability set by the Bank during 2005. It also reinforces our reputation for delivering consistent returns to our shareholders and clients, regardless of market volatility.
Total assets increased by 133 per cent to US$1,287 million, while shareholders’ equity grew by 110 per cent to US$524 million.
“The first three months of the year witnessed the achievement of a number of major milestones. These include an increase in the Bank’s total capital to US$391 million following the successful closure of the rights issue, and regulatory approval to list our shares on Dubai Financial Market,” added Dr Al-Omar.
The first quarter of 2006 was highlighted by significant investment exit activity by GFH. A total of three exits, all profitable, were successfully undertaken. These generated returns ranging from 20 to 40 per cent, over investment time frames of between one and four years.
Commenting on the Bank’s achievements during the first quarter 2006, Mr. Esam Janahi, Chief Executive Officer and Board Member of GFH said: “The Q1 results confirm the resilience of our business model, which is not dependent on stock market conditions. These results come on the back of a number of successful investment placement activities: most significant was the overwhelming response in the first quarter to the second tranche of fundraising for the Energy City Qatar project, which brings total equity raised to date to US$ 510 million. This underscores the strength of the Bank’s fundraising capability, and the trust that our clients continue to place in us.
“Towards the end of the first quarter, GFH launched Qatar Finance House (QFH) in cooperation with Qatar Islamic Bank. The licence application has been submitted to Qatar Financial Centre Regulatory Authority, and response from investors to date has exceeded our expectations,” he said.
Mr. Janahi confirmed that the Bank’s strategy for 2006 is to diversify investment and revenue generation activities in line with emerging opportunities in the region as a whole. “We aim to introduce to our clients additional opportunities to invest in the financial services sector, together with a new opportunity to invest in the telecommunications sector. At the same time, we will continue to provide clients with additional infrastructure project investment opportunities, both regionally and internationally. Our Pan European Real Estate Fund is currently open to clients looking for immediate investment opportunities outside the region.
“I am also delighted to report that the Bank’s private equity business in Europe is developing in accordance with our geographic and strategic plans,” he added. “In addition to direct investment in income-producing real estate, we now have a new European team in place, together with a new strategy directed specifically at corporate acquisitions in that continent.”
The financial results of GFH for Q1 2006 are prepared on a consolidated basis and include the results of the Group’s wholly-owned subsidiary, Gulf Finance House Commercial Bank (GFHCB), which posted a net profit of US$6 million for the first quarter of 2006, compared with US$11 million for the whole of 2005 (equivalent to an annualised increase of over 100 per cent), the first full year of operations for GFHCB.
