Kuwait's troubled Global Investment House plans to shut some branches abroad and scale back investments as it faces the global economic downturn, its managing director said.
"It's not the time to have branches in 16 countries. We will try to reduce our operations. Some branches which in our view are not strategic today will be closed," Maha al-Ghunaim told CNBC Arabia television in an interview aired on Tuesday.
At the end of 2008, Global had liabilities of $3.1 billion after defaulting on a $200 million loan in mid-December, its executive vice-president Bader al-Sumait told Al Arabiya television last month.
Global, the country's biggest investment bank, will focus on its main branches in Kuwait, Egypt and Saudi Arabia, Ghunaim said.
Last month, Global said it had laid off around 40 employees and reduced salaries by up to 20 percent to cut costs due to the slowdown. Global has said it had over 600 employees.
Ghunaim said the firm aims to scale back investments and focus more on its asset management, investment banking and brokerage business. "We should reconsider financing for direct investments or for long-term investments."
Global said in December it aims to cut its principal investment book by at least a third from 1 billion dinars within a one-year time frame.
Global's stock has fallen 62.5 percent this year, underperforming the main index which has lost 17.8 percent.
Investment firms, roughly half of Kuwait's listed companies, have been urging the government and banks to provide them with fresh loans to bridge short-term funding gaps with some considering asset sales to get cash.
Kuwait's government has proposed a $5.1 billion economic rescue plan that includes state guarantees for fresh bank loans to investment firms. It still requires parliament approval. (Reuters)For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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