Kuwait's Global Investment House posted a first quarter net loss of 69.5 million dinars ($239.9m), mainly on investment losses, a relative improvement after a major fourth-quarter dive last year.
The country's biggest investment bank, which defaulted on most of its debt earlier this year, is among the most prominent firms in the Gulf Arab state's financial sector to face serious problems amid tight credit conditions.
The first quarter loss comes after a 360.5 million dinar it posted in the fourth quarter last year. Global made net profit of 34.7 million dinars in the first quarter of 2008, it said in a statement on Thursday.
Global said impairment charges from investments amounted to 21 million dinars in the first quarter, while an extra 27.9 million dinars were losses by affiliates mainly on write downs in valuation of assets in the real estate and financial sectors.
"The first quarter results continued to be impacted by global and regional market turbulence and material decline in overall investment and investment banking activities in the region," the bank said in a statement.
Shareholder's equity declined 21.7 percent to 241.9 million dinars, while total assets rose 23.3 percent to 1.19 billion dinars, Global said on the Kuwaiti bourse website.
The bank said that it had not yet reached an agreement with its roughly 50 creditors to reschedule its debt and revamp its business.
"Although much work remains to complete the restructuring, Global remains confident that by working cooperatively with the lending group, a sustainable, long-term financing solution for the company is likely to be achieved in the coming months," it said in the statement.
Global began talks to reschedule its debt in December, saying it would take only a few months to reach an agreement.
It appointed HSBC as an adviser to hold talks with foreign lenders and named Commercial Bank of Kuwait as its local adviser.
The troubles of Global and other investment firms, including major Islamic firm Investment Dar , led the government to approve a rescue package worth 1.5 billion dinars.
The plan includes state guarantees for fresh loans to help investment firms weather the global financial turmoil.
Global said losses per share came in at 57 fils in the first quarter, compared with earnings per share of 37 fils in the same period a year earlier. There are 1,000 fils in a dinar.
Fee operating income in the first quarter was 6 million dinars, compared with 6.8 million dinars in the year-earlier period, it said.
Shares of Global fell 3.7 percent on Thursday. Earnings were released after the market closed. (Reuters)For all the latest business 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.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.