By Rebecca Bundhun
Bahrain-based investment bank reveals year end profits dropped 14 percent compared to 2007.
Gulf Finance House (GFH) has announced year end net profits of $291 million, representing a 14 percent fall on a profit of $340 million in 2007.
The Bahrain-based Islamic investment bank said it had three consecutive quarters of positive earnings in 2008, but suffered a loss of $10 million in the fourth quarter, “primarily due to conservative provisions on investments”.
Earnings per share were 37.01 cents compared to 42.79 cents for 2007.
Return on equity of 2008 was 31.62 percent and return on assets was 10.19 percent.
The bank explained in a statement that while annual profits had technically fallen, $84 million of the $340 million profits in 2007 were due to the sale of its 60 percent stake in Khaleeji Commercial Bank.
“Relative to the global investment banking sector we have reason to be very pleased with our year end results.
“As a Shariah compliant bank we are not directly exposed to collaterized debt obligations and similar asset classes,” said GFH chairman Esam Janahi.
With over $1 billion of liquid assets, the bank remains confident that it is well-placed to weather the downturn.
Standard & Poor’s (S&P) on Monday revised its outlook for GFH from stable to negative, citing high leverage and a difficult operating environment as the main reasons for the revision.
S&P on Wednesday downgraded two other Bahrain-based investment banks – Investcorp and Arcapita.