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Global Investment House narrows losses 50%

Global Investment House, the Kuwaiti investment bank currently in the midst of its second restructuring since the financial crisis started, narrows its quarterly losses amid widespread cost-cutting.

Global Investment House has reported its 14th consecutive quarter without a profit but narrowed its losses by half after asset sales and cost-cutting.

The Kuwaiti investment bank, once among the largest in the Middle East but now undergoing its second restructuring in three years, had a net loss of 11 million Kuwaiti dinars (Dh143m) in the first quarter of this year.

That represents an improvement of 50 per cent from the corresponding period a year earlier.

"Global continues its drive to rationalise its cost base," the bank said in a statement.

"Global is in constructive and regular engagement with its creditors to seek a long-term solution to its capital structure."

Total assets fell during the year by 14.8 per cent to 550.3m dinars at the end of the first quarter.

The bank said staff costs during the quarter were 12 per cent lower than during the same period a year earlier, as it sought to make savings through job cuts.

Revenues of 2.4m dinars during the quarter compared with negative revenues of 11.1m dinars during the corresponding period last year.

Finance costs increased by 2 per cent to 6.2m dinars during the same period, as a result of higher payments on its restructured debts.

Global was forced to restructure US$1.7 billion (Dh6.24bn) of debt in 2009 after the onset of the global financial crisis. However, the bank had to renegotiate a further $1.7bn of its restructured debt by September.

Global is due to meet bondholders on June 7 as part of the restructuring process. The narrowed losses come a week after Global won a $329m legal battle with the tiny lender National Bank of Umm Al Qaiwain (NBQ) for the second time.

A failed sale of a convertible bond by NBQ to Global at the onset of the financial crisis led to a $250m deposit being claimed by NBQ, sparking a dispute that has dragged on for several years.

Successive verdicts in Global's favour took the case as high as the Dubai Supreme Court, which in November returned the case to the Court of Appeal for a second hearing.

But the Court of Appeal again found in favour of Global on May 21, requiring NBQ to return the deposit plus interest, worth a total of $329m. NBQ said it would seek to appeal the case.

Global's shares were suspended from trading on the Kuwait Stock Exchange in December because of accumulated losses exceeding 75 per cent of its capital.

ghunter@thenational.ae

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