GFH 2017 income more than halves amid difficult market conditions

Bahrain-based investment bank GFH Financial Group reported a 56 per cent drop in its 2017 full-year net profit as income declined  amid difficult market conditions.

Consolidated net profit for the 12-month period to the end of December came in at $103 million (Dh378m), down from $233m recorded a year earlier, the company said in a regulatory filing on Wednesday to the Dubai Financial Market. Total income more than halved to $204.36m from $570m for the same period, it said.

These results, in real terms, reflect year-on-year growth in all areas of the business when excluding a $464m in one-off income from the settlement of litigation by the GFH group in the fourth quarter of 2016, the company said in a separate statement.

The Sharia-compliant investment bank's board recommended distribution of 8.7 per cent cash dividend, which equals to $85m. It had distributed 10 per cent cash dividend for financial year 2016.

Net income attributable to shareholders for the fourth quarter of 2017 was reached $16.9m, down from 213.18m recorded for the last three months of 2016, according to the statement.

GFH, which swung to $25.09m profit in the third quarter of 2017 from a loss of $7.58m for the same period in 2016, was expecting a similar performance for the final quarter and into 2018, its chief executive Hisham Al Rayes said in December.

Ahmed Al Khalifa, chairman of GFH, on Wednesday said the 2017 financial year results are significant despite macroeconomic and geopolitical challenges that have persisted in the Mena region and other global markets where GFH invests.

"We look to leverage our expertise and track record in order to continue to grow each of our business lines and to maximise our investments and asset, across the multiple sectors and geographies in which we are active," he said.

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“We are also hopeful that with the strong foundations we have built, and the strategies adopted, we will be well placed to capitalise on rising oil prices and forecasts that have provided the region with greater optimism during 2018.”

Total assets of GFH grew by 25 per cent to $4.11 billion at the end of 2017 while its liabilities climbed to $1.71bn from $1.16bn at the end of 2016.

The investment bank, whose shares are listed in Bahrain, Kuwait and Dubai, is looking to secure approval from Saudi Arabia’s market regulator in the first half of this year to cross-list on the Tadawul stock exchange, the region’s biggest bourse by market capitalisation.

Abu Dhabi-based Goldilocks Investment Company, controlled by Abu Dhabi Financial Group, in January said it took a 4.99 per cent stake in GFH. Other GFH shareholders include Integrated Capital and ADFG. Together with Goldilocks, these shareholders hold around 15 per cent of GFH's total shares.