Gulf Finance House reports strong 2nd quarter results

Earnings per share for the second quarter 2007 were 10.55cents (US$) compared to 8.65cents (US$) for end of June 2006. The net profit for the first half of 2007 totalled US$ 145.9 million with a return on equity of 43% and return on assets of 18%.

Gross income rose by 35% over last year, reflecting strong performance in both income from advisory services and sale of investment securities. Total assets increased to US$1.8 billion up 20% from US$1.5 billion at end of December 2006. This growth is largely attributable to the expansion of GFH's strategic investment portfolio which includes investments in Khaleeji Commercial Bank and QInvest in Qatar.

The strong results mark the end of a busy quarter that saw a number of milestones achieved. A major highlight saw H.E. the Prime Minister of Bahrain, Sheikh Khalifa bin Salman Al Khalifa, conduct the Official opening of the Bahrain Financial Harbour in May 2007, a landmark project financed and promoted by GFH. GFH also commenced the marketing of its private placement to raise US$395 million to fund the infrastructure development of Energy City India.

GFH also increased its investment in its wholly owned subsidiary Khaleeji Commercial Bank by raising KHCB's capital to US$ 265 million, before selling a 30% stake to a group of regional financial institutions. In the second quarter GFH also capitalised QInvest, one of the first Islamic investment banks to be launched in Qatar, taking a 15% stake for US$ 75 million.

GFH ended the quarter by completing the bank's US$ 275 million secondary listing of Global Depository Receipts (GDR) on the London Stock Exchange (LSE) marking GFH as the first Islamic Bank in the Gulf to be listed on the LSE and the only business from the Gulf to be listed in London during the first half of 2007.

Commenting on the results, Dr. Fuad Al Omar, Chairman of GFH said: "The second quarter of 2007 will be seen in the future as a watershed in the history of GFH. In addition to the continuance of the previous trend of strong profits, the GFH GDR on the London Stock Exchange was well received and welcomed by the international investment community."

Elaborating on the Bank's second quarter 2007 successes, Mr. Esam Janahi, CEO and Board Member of GFH said: "We look forward to delivering a very successful 2007 which will further enhance shareholder value and continue to build our franchise. The second half of the year will see announcements of more new development infrastructure projects as well as two major profitable exits for our clients.."

Mr Peter Panayiotou, Deputy CEO of GFH added that "Our development infrastructure business continues to grow and will remain our main focus going forward. The international investment community recognises the uniqueness of our business model and our leadership in this field. We have a strong pipeline of opportunities and the confidence of international investors in GFH to support our strategy. We are well placed to achieve our objectives."

The financial results of GFH for second quarter 2007 are prepared on a consolidated basis and include the results of its subsidiary, Khaleeji Commercial Bank (KHCB), which posted a net profit of US$ 11 million for the second quarter of 2007, compared with US$ 8 million for the corresponding period of 2006.