GFH capital raising to strengthen balance sheet and drive new period of growth

The rights issue, which has already received the Central Bank of Bahrain's 'in principal' approval, will also support long term expansion and diversification plans of the bank as it looks to new geographies. The rights issue remains subject to shareholder approval.

In a further announcement today, GFH confirmed that Bank of America Merrill Lynch (BAML) has been appointed as its Financial Advisor and Corporate Broker. They have been retained to advise on and assist in coordinating a variety of planned activities designed to establish momentum for a new period of growth. GFH have also appointed KPMG Corporate Finance to act as Issue Managers for the rights offering across the regional markets.

GFH Chairman Dr. Esam Janahi commented on today's announcements saying, 'There have clearly been unprecedented challenges across the global marketplace over the past nine months but we're optimistic that during the second half of 2009 the bank's operating income will be close to break even point or better. At GFH, our focus must be to adapt our approach to the markets we serve and our planned rights issue is a crucial and positive first step in this process.'

'We must ensure that GFH is in the best position possible as the investment community emerges from the global economic downturn. Our new CEO Mr. Ahmed Fahour, is devoting his energy and vast experience to the pursuit of continued diversification and new international investor audiences. He's been instrumental in originating and developing the initiative we've announced and now, with the appointment of Bank of America Merrill Lynch, we have a truly world class team in place.'

Incoming Gulf Finance House CEO Ahmed Fahour added, 'In one of the toughest trading years on record, GFH has continued to absorb the harshest effects of the downturn, adapt the business model to market conditions and lay the groundwork for a new period of growth.'

'Foresight is the cornerstone of the Bank's reputation. Our announcement of a capital raising initiative gives notice that we believe we need to strengthen our balance sheet to enable it to withstand whatever the global financial crisis still has in store for us. By the same token, this global recession will also create some excellent investment opportunities in the near horizon which GFH will be able to take advantage of. To assist us in this and a number of other activities we anticipate announcing over the next few months we're pleased to have appointed Bank of America Merrill Lynch as our financial advisors.'

'The steps we're taking and the announcements we anticipate over the next few months are focused entirely on building the strongest organization possible. We make no secret of our plan to establish GFH as the world's leading Islamic investment bank and all our efforts will be driven towards this goal.'