Font Size

- Aa +

Tue 30 Aug 2011 12:46 PM

Font Size

- Aa +

Higher costs push Bahrain’s GFH into the red

Lender says $11.23m Q2 loss due to rise in finance expenses, exchange rates

Higher costs push Bahrain’s GFH into the red
GFH has struggled to pay back the debt it took on during the Gulfs property boom

Bahrain's Gulf Finance House posted a net loss of $11.23m in
the second quarter due to higher finance expenses and the impact of exchange
rates, the company said in a statement on Tuesday.

The second-quarter loss was narrower than the $40.2m loss
the company posted in the comparable period one year ago. The Islamic
investment house swung to a profit of $700,000 in the first half of the year,
compared to a loss of $47.6m in the same period in 2010.

Total income for the first half climbed 27 percent to $32.8m,
driven by asset sales and the settlement of liabilities.

"Looking ahead to the second half of the year, we
expect a larger contribution to the income from our subsidiaries and
associates, particularly Khaleeji Commercial Bank and G Capital," said
Hisham Al Rayes, chief investment officer at GFH, in the statement.

The company took a 47 percent stake in Bahraini retail bank
Khaleeji Commercial Bank last November.

G Capital, a Dubai-based subsidiary, acquired Adabank in
Turkey for $75m earlier this month.

GFH has been hard hit by the Gulf's economic crisis and
struggled throughout 2010 to pay back the debt it took on during the Gulf
property boom that ended in 2008.

The company's chairman and major shareholder sold 7 million
shares of the investment firm to Al Ahlia Bahrain in July, valued at BD527,800 ($1.4m).

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.