Gulf Finance House net profit rises 275per cent to USD15.4 million in first quarter 2004

Announcing the results in Bahrain today, senior officials of the bank, which recently listed its shares on the Bahrain and Kuwait stock markets, said that the excellent Q1 results were driven by a diversified investment strategy, which saw an increased focus towards larger real-estate based investments, both in the regional and international markets.

Dr. Fuad Al-Omar, Chairman of GFH said: "The results are an undoubted vindication of the successful strategy that the bank has implemented, which is primarily aimed at pursuing investment opportunities that provide high yields to investors in an increasingly value-driven business environment. The momentum that GFH has built up has boosted earnings. As a result the net profit of the bank in the first quarter of 2004 is close to the US$17 million full-year results of 2003," he added.

"The increase in the bank's paid-up capital to US$ 135 million, coupled with the sharp rise in retained earnings during the first quarter, has helped the bank to double its net worth to over US$200 million," he added.

Dr. Fuad Al-Omar commented: "Over the last four years GFH has been successful in enhancing the value it delivers to its shareholders. Earlier this year, with a view to increasing our shareholder base across the Gulf, we listed on the Kuwait and Bahrain stock markets, a move that has met with tremendous investor response in the region."

Real estate led investment strategy in the GCC spurs GFH growth
Commenting on the details of the 2004 Q1 results, Mr. Esam Janahi, Chief Executive Officer of GFH said that since its inception four years ago, GFH has acquired a strong reputation for structuring unique and innovative investment opportunities in various segments of the regional and international real-estate markets.

"During the quarter, the bank earned investment banking fees from the Al Areen Desert Spa and Resort project based in Bahrain, the US$600 million leisure, entertainment and health tourism project which was launched in January 2004. Similarly, income from the upcoming US$1.3 billion global financial and business city, Bahrain Financial Harbour (BFH), the construction of which has already started, also contributed to our positive Q1 performance."

"We are also increasing our focus on the real-estate markets of Kuwait, the UAE and Oman. We have started new ventures such as the Gulf Development Real Estate Company in Kuwait and we have taken equity stakes in existing companies elsewhere."

Mr. Janahi further said that in keeping with its philosophy of providing investors with unique and innovative investment opportunities, GFH was active in seeking investment opportunities in other key overseas markets.

"In fact, earlier in March, we unveiled a new fund with a targeted capital of US$50 million, which will invest in real estate development projects in the Western Costa del Sol, a popular European investment destination which includes the resort town of Marbella.

"Our entry into the Spanish real-estate development sector follows the successful launch and closure of similar investment vehicles in the European markets of the United Kingdom and France," added Mr. Janahi.

The investment bank launched Gulf Atlantic Real Estate (GARE) in 2002 to invest in a diversified mix of income generating commercial properties in the UK. Launched the following year, Gulf Atlantic FZ-LLC (GAF) invests in a mix of income earning properties in the Paris region of France.

Established only four years ago, GFH has rapidly earned a reputation as a leading-edge player in Islamic investment banking. GFH now has a paid-up capital of US$135 million and authorized capital of US$300 million.