Gulf Finance House lists successfully on Bahrain Bourse

The listing on KSE comes close on the heels of the GFH listing on the Bahrain Stock Exchange (BSE) on January 20 2004 with the scrip price rising to a closing price of US$1.48, on the second trading from US$1.20 at the start of the first day of trading. The total trading volume on the second day of trading was over 2,000,000 shares.

Announcing the listing on the KSE, Mr. Esam Janahi, Chief Executive Officer, GFH, said: "The listing on the Bahrain and Kuwait Stock Exchanges comes at a time when GFH is growing rapidly. The bank's shareholders are spread across the GCC and it was logical that we allow a wider representation of investors from these countries to take part in our success. This was the primary reason behind the dual listing on the Bahrain and Kuwait bourses."

Over the last four years the portfolio of assets under management by GFH has grown over 11 times, indicating the steady growth of the bank and a confident outlook.

"In 2000, assets under management stood at US$21 million. It grew to US$39 million the next year, US$101 million in 2002 and have more than doubled in 2003. If we include the leveraged component also, total assets under management would be approximately US$1 billion in 2003," Mr. Janahi said.

GFH which raised its capital base to US$135 million from the existing US$ 65 million at the end of last year is a pioneering global and regional leader in Islamic investment instruments in real estate, infrastructure and various other economic sectors. The bank also provides structured finance and securitization, liquidity management, consultancy and advisory services. After the increase in capital GFH's net assets will exceed US$200 million.

Earlier this year, GFH was singled out as the "Most Innovative Islamic Finance House", by Euromoney, the reputed London-based journal specializing in global capital and money markets. In December last year, Mr. Esam Janahi was named Islamic Banker of the Year, at the World Islamic Banking Conference held in Bahrain.

The bank's net profit also rose substantially in 2003 driven by sound investments in European and regional real estate markets, and including a healthy flow of funds into the newly announced global and financial business park, the US$1.3 billion Bahrain Financial Harbour (BFH).

"Our profitability has been on a consecutive rise ever since we announced our first full year results in 2000. We ended that year with a net profit of US$7.1 million which subsequently grew to US$11.1 million in 2001 and US$13.3 million in 2002. That trend has continued in 2003. Our dividend payouts also have been very healthy during the course of the last four years," Mr. Janahi said.

GFH has carved a niche for itself in the regional banking and investment industry thanks to the unique nature of its investment strategy. "GFH's business model is not dependent on stock market conditions. GFH provides investment services to its clients, originating in innovative deals and by structuring investment and debt Islamically. Accordingly, GFH has established a regular stream of annuity type fee-income derived from future phases of projects that will take a number of years to complete.

"We have developed various SPVs (special purpose vehicles) representative of various industry segments catering to various investor groupings. The reasons behind our continuing success primarily lie in our ability to offer structured Islamic investments in property and real estate in regional as well as in the UK and France markets," Mr. Janahi said.

The bank's European real estate investment offerings include the Gulf Atlantic Real Estate (GARE), which offers clients a healthy avenue to invest in blue chip property in the UK market and Gulf Atlantic FZ-LLC (GFF), which is focused on the property market in France, particularly Paris and close by markets.

In the Bahrain market, GFH launched AQAR I, a US$20 million investment fund focused on high cash-yield investments within the serviced apartments sector in Bahrain. The fund, which has been successfully launched and subsequently closed, has already established a regular history of paying cash dividends.

Diversifying its business, GFH has also recently announced a US$600 million resort project - the Al Areen Desert Spa and Resort - in Manama, which is being developed as a premier attraction in Bahrain for family and health-oriented tourists.

"We have major pipe-line projects for 2004 which will include developing big leisure property projects in Dubai and Bahrain. We are also in the process of identifying unique, income-producing high-yield real estate investments in the GCC and the Middle East market," Mr. Janahi said.

The current GFH investment portfolio also includes Lebanon's Arabic Finance House, Bahrain's Royal University for Women, Sharjah-based low-cost airline Menajet, aluminum producer Balexco, and international franchises Avis, Costa Coffee, Chilis, Nandos Johnny Carino's and US ambulance manufacturer Halcore.

GFH has also established Solidarity, a life assurance and annuity company which is the first regional Takaful company to offer products complying with the Islamic Shariah.