Abu Dhabi, UAEMonday 19 August 2019

Bahrain's GFH Group's second quarter profit slides

Profit attributable to company's shareholders fell to $27.8 million in the three months ending June 30

Bahrain's investment bank GFH posted a decline in second-quarter profit. Alamy 
Bahrain's investment bank GFH posted a decline in second-quarter profit. Alamy 

GFH Financial Group, an investment bank based in Bahrain, reported a 22.9 per cent slide in its second-quarter profit as expenses nearly doubled.

The profit attributable to company’s shareholders in the three months ending June 30 declined to $27.8 million (Dh101.9m), GFH said on Thursday in a filing to the Bahrain Bourse, where its shares trade.

Total expenses rose 89 per cent to $65.2m in the second quarter, up from $34.4m in the same period a year ago, according to the financial statement. Finance costs for the investment bank jumped to $30m, up from $8.5m in the prior-year period. Meanwhile, operating expenses for the period rose to $26.9m from $ 21.8m, and allowances for impairments more than doubled to $8.3m.

However, income from its commercial banking and investment banking arm as well as real estate activities, all rose during the quarter. For the six months to June 30, the company reported a 31 per cent fall in net profit to shareholders of $48.9 million, despite a 22 per cent increase in revenue to $163.5m. Half-year finance costs rose to $53.7m, up from $15.4m a year earlier. Provisions for impairments climbed to $12.2m, up from $5.7m.

In a conference call announcing its results, GFH's head of financial control, Suryanarayanan Hariharan, said the group's total assets increased to $6.1bn by 30 June, up from $4.9 billion at the end of 2018 "primarily on account of liquid assets of the bank". Liabilities increased to $3.8 billion up from $2.7bn at the end of 2018, "primarily due to the increase in money market funds raised by the bank".

He said money market funds had increased to to $2.2 billion by the end of June, up from $1 billion at the end of 2018.

"We have an exciting pipeline of both regional and international transactions which will be presented to our investors during the coming quarters of 2019," said Mr Hariharan.

In a statement announcing the bank's results, GFH's chairman, Jassim Alseddiqi, describe the bank's expanded treasury business as "a strong example" of efforts being made to diversify the business. "Having performed extremely well, this is an area we will continue to grow and benefit from as we go forward.”

Updated: August 8, 2019 06:30 PM

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