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Al Mutawa and Al Rayes.

Gulf Finance House swings to 2014 profit

MANAMA, February 22, 2015

Bahrain-based Gulf Finance House (GFH) has registered a consolidated net profit of $17 million for the fiscal year ended December 31, 2014 when compared to a net loss of $18 million the year before.

Announcing the results, GFH said 2014 was a transformative year marked by the launch of the new strategy and identity of the bank. The total consolidated income surged to $160 million compared to $13.5 million in 2013.

Excluding income of $94.3 million from nonbanking operations, this reflected a sharp 387 per cent rise in investment banking income, compared to the previous year. This was the result of a significant increase in placements and recoveries made during the year, said a statement from GFH.

The Bahrain group said the profit attributable to shareholders was $11 million compared to a loss of $18 million for 2013.

Commenting on the results, chairman Dr Ahmed Al Mutawa, said: "We have taken steps in 2014 to recapitalise our balance sheet, strengthen our structure and emerge as a financial group."

"We embarked upon a new strategy to create a more stable financial position by increasing our capital and enhancing the balance sheet, while focusing on acquisitions to strengthen the financial position of the group and our co-investors through steady streams of income and opportunities for strong upside potential at exit," he noted.

According to him, the operating profit before provisions for the year was $27.6 million compared to a loss of $14.6 million in 2013. Total provisions of $10.5 million were taken in 2014 by GFH, he added.

The operating expenses for the year were seen at $133.8 million. Excluding costs related to non-banking income, expenses were $42 million compared with $34.6 million in the prior year, stated Al Mutawa.

Looking at the group's fourth quarter results, net profits stood at $1.4 million compared with a loss of $18.7 million in 2013.

This was mainly attributed to the successful placement of the group's investments in two key residential transactions during the last quarter of the year, whilst this was affected by equity market crash in fourth quarter by $6.3 million, he added.

CEO Hisham Alrayes said 2014 was a year of returning back strongly to investment placement, through attracting and placement of $86 million in a number of attractive investment transactions.

"We also concluded a number of successful exits from some of the investment projects, in addition to successful recoveries due to the bank from various parties, in addition to the settlement of some claims," he stated.

Al Rayes said the company continued to work hard to enhance the potential of its current investments and seek out new opportunities for growth of the group and co-investors with the launch of three investment projects.

These are Philadelphia Private School in Dubai, “Nurollife” residential project in Istanbul, in addition to a diversified investment portfolio including US residential properties in Houston and Atlanta, located in a different economic environment with distinctive options in each area.

"We profitably exited a UK real estate investment during the third quarter of 2014 delivering returns to investors at a rate of 21 per cent every year," he noted.

In 2014, GFH resumed its activity in key projects in Tunisia and Morocco through working with a number of companies to restructure the debts and liabilities of the projects, said Al Rayes.

"In addition, the group worked towards the completion of the master plan of its Dubailand project with Stantec of Canada engaged with WATG of the US to advance our Waterfront project in Bahrain as well as making progress on restarting the development of the Villamar project in Bahrain, he added.

On the future outlook, Al Rayes said 2015 will be an important year for GFH as the group looks forward to concluding a number of acquisitions to enhance the balance sheet, implement its strategy and realise greater returns that allow it to make distributions to  shareholders.-TradeArabia News Service

Tags: Bahrain | Gulf Finance House | profit |

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