GFH announces second quarter profits of $104m, up 41% from Q2 2007

Half year 2008 profits stand at $220m, up 51% from the same time last year.

The results continue the trend of strong earnings growth established in the first quarter and demonstrate the success of the bank's strategy to diversify its sources of revenue to provide long term sustainability and further develop its foundation for growth.

The revenues for the second quarter were derived mainly from fees earned from the latest economic infrastructure project - Energy City Libya - and a strong contribution from the bank's Venture Capital business whose latest project during the second Quarter, Cemena, was launched.

Across MENA and Asia, GFH has established a unique and market dominant position in the business of originating, financing and delivering economically driven infrastructure projects anchored around industry specific business clusters.

Energy City Libya is the latest in GFH's expanding series of Energy cities, which already include Qatar and India. Formed as a joint venture with the Government of Libya to create Libya's first integrated energy business cluster, Energy City Libya is set to consolidate Libya's energy industry by providing complete business infrastructure to both local as well as foreign oil and gas producers, downstream refiners and producers and businesses involved in shipping, energy trading and support services.

Cemena will become one of the largest producers of cement in the MENA region and intends to achieve a market dominant position within the MENA marketplace in the medium term.

This new Venture Capital business initiative follows the establishment and licensing of First Energy Bank (FEB) earlier this year.

During the second quarter GFH completed the capital raising of First Energy Bank, which now has a fully paid capital of $1bn.

The successful launch of FEB and Cemena in the first half of 2008 demonstrates the strength of the GFH Venture Capital team in the MENA region.

During the end of the second quarter the Asset Management business of GFH launched the 'Gulf Atlantic Real Estate II' UK commercial property fund whose investment strategy is to take advantage of falling commercial property prices and distressed market conditions across the UK real estate market.

Commenting on the second quarter results, Gulf Finance House Chairman Esam Janahi stated, 'Having made a formidable start to 2008, our momentum is undiminished thanks to the robust demand amongst governments for our economic infrastructure projects and the impact on our bottom line of our other rapidly growing business lines, particularly our MENA Venture Capital business. This year our placement capability has reached new dimensions following the significant expansion particularly of our institutional client base as major investors turn to us to help them achieve higher returns.'

'With the strongest deal pipeline in our history in all our business lines the time has come to review our current organisation structure in order to optimize our business operations. Accordingly, the Board of GFH has commissioned a review by leading international consultants to identify the right management and legal structure going forward. Following the London listing we have seen a marked increase in interest from higher quality managers wishing to make their careers at GFH.'

Peter Panayiotou, GFH's acting-CEO commented, 'We have worked hard to implement the strategy set last year and achieve the deal volumes and earnings targets that the Board set. Obviously, I am very pleased that we are meeting those objectives. The main features of the second half are the breaking of new records for placement, the increase in the institutional client base and the rapid establishment of our Venture Capital business in the MENA region. These developments demonstrate that we are meeting our commitment to our shareholders to diversify our revenue stream. Our investment philosophy is simple. At all times we look for opportunities to create value: we do not rely on market movements alone to generate returns. On the organisational front it is clear that the challenges of managing our business are growing - we recognize this and are taking a major step to rationalize the way we manage and control our activities and risks.'