MANAMA, 1 February 2005 — The Bahrain-based Islamic investment and commercial banking group, Gulf Finance House (GFH) announced yesterday a consolidated net profit of $56.9 million in 2004, an increase of 233 percent over the year before.
The group will focus attention this year on existing projects to build on its portfolio projects in Saudi Arabia Jordan and Oman.
“The 2004 results of GFH are a ringing endorsement of the soundness and progressive vision of the bank,” said its Chairman Dr. Fuad Al-Omar.
“During the year we more than doubled the bank’s share capital and listed the bank on the Kuwait and Bahrain stock exchanges.”
“We also opened a new on-shore commercial bank toward the end of the year, which focuses on real estate. The listing of the bank focused our attention on the issue of corporate governance and we took the initiative of organizing an independent review by international consultants.”
The solid results represent a return on share capital (including share premium) of 33 percent (2003 — 23 percent). Basic earnings per share increased by 92 percent to reach $0.14 (2003 — $0.0728). The bank proposes to pay a dividend for 2004 of 30 percent on paid-up capital (excluding share-premium) (2003 — 15 percent) of which 7 percent will be in shares and the remainder in cash.
“For GFH, 2004 was definitely a year of major milestones. The bank’s investment strategy in 2004 was two pronged: To focus on major infrastructure projects and to secure profitable exits for our clients. This strategy has paid off,” said Chief Executive Officer Esam Janahi. “Our clients have displayed a keen appetite for investment in major infrastructure projects in the GCC.
“We also successfully secured our first private equity exit, for the Al Areen Resort and Spa development in Bahrain and we secured the Legends project at Dubailand. Construction of the first phase of the Bahrain Financial Harbor started last year. We also closed our Al Andalus fund in Spain in 2004, which has now successfully invested in blue-chip properties in Western Costa del Sol,” he said.
“For us, 2004 proved a watershed not just in terms of investments but also in terms of exits. We concluded successfully the sale of our clients’ investment in IFC at a price that returned a total of over 50 percent to our clients over the three-year holding period and we have further exits planned during the first half of 2005.”
Commenting on some of the achievements last year, Janahi said the increase in capital allowed GFH to establish a new Islamic commercial banking subsidiary, GFH Commercial Bank, which is a strategic initiative aimed at investments in the real estate sector, with an initial focus on Bahrain.