Gulf Finance House announces third quarter financial results

The third quarter loss is attributed to nascent placement activity offset by ongoing cost management efforts.

The results mark an improvement of 46% from the second quarter 2009 net loss of $54m.

During the last three months GFH has focused on strengthening its balance sheet, diversifying the strategic business model and making the organizational changes necessary to begin bridging the revenue gap in 2010 and emerge as the world's leading Islamic investment bank. During the course of a highly successful rights issue exercise targeted at raising between $200 mn to $300 mn, the Bank received subscriptions in excess of $300m. In addition, GFH has announced the first of two $100m convertible murabaha facilities with Macquarie Group and has begun the sale of non-core assets with a partial divestiture from Qinvest in a deal worth $51m.

As a result of ongoing capital management initiatives, GFH has significantly enhanced its liquidity position and will soon be able to deploy approximately $350m of the monies raised. The Bank's capital adequacy post these initiatives is around 20% making it one of the best capitalized investment banks in the region. In the months ahead, with a strategic plan of realizing value from exiting investments and closing its balance sheet capital and debt raising efforts, this ratio is expected to improve further.

Commenting on the results and the success of the ongoing liquidity and capital management plan, GFH Group CEO Ahmed Fahour said:

"2009 has been incredibly tough on the world's economy and while our results do reflect this trend, I'm confident that in the years to come, shareholders will look back on the third quarter of 2009 as a watershed moment. In just a few months GFH has executed the largest and most successful non-governmental equity raising in the Middle East this year. We met and exceeded our target, raising more than $300m from the rights issue in addition to the success of our other liquidity and capital management initiatives. To date, we've achieved everything we set out to do and more because we promised our shareholders that we will build their bank into the world's leading Islamic investment bank and they have responded with unfailing support."

Fahour added, "We are in the business of wealth creation and this year has been one of the hardest on record for shareholders but we will work tirelessly in the short term to secure a prosperous long term future for their Bank."