Gulf Finance House profits decline 14%

Dubai: Bahrain-based investment bank Gulf Finance House (GFH) yesterday reported a 14 per cent decline in profits down to $291 million (Dh1.07 million) in 2008 from $340 million in 2007.

"For the majority of the year, the bank continued a trend of strong earnings in comparison to 2007 despite turmoil in the global economy and a more cautious investment community," the company said in a statement.

Following three strong quarters of earnings in 2008, GFH reported a loss of $10 million in the fourth quarter primarily due to conservative provisions on investments.

"While annual profits have technically fallen, $84 of the $340 million profits in 2007 were accounted for by the sale of 60 per cent of GFH's holding in Khaleeji Commercial Bank - a non-recurring exceptional item," it said.

Earnings per share were 37.01 cents (US) compared to 42.79 cents for 2007. Return on equity of 2008 stood at 31.62 per cent and return on assets stood at 10.19 per cent.

GFH's board of directors has proposed a total dividend of 40 per cent, payable as 20 per cent cash and 20 per cent bonus shares, subject to the approval of the Central Bank of Bahrain (CBB) and the annual general meeting.

Annual profits have been driven both by investment in our economic infrastructure initiatives - namely Tunis Financial Harbour, Energy City Libya and Caspian Energy Hub - and the success of Cemena and First Energy Bank which underline the increasing importance of our diversified product range.

Further income was derived from GFH's share of the net income of Khaleeji Commercial Bank and Qinvest. Gulf Finance House Chairman Esam Janahi said, "Relative to the global investment banking sector we have reason to be very pleased with our year end results."