Gulf Finance House delivers impressive Q3 results; net profit rises 93% over last year to US$92 Million

The bank's assets during the quarter also increased by 81% to US$840 million from US$465 million.

Announcing the results, Dr. Fuad Al-Omar, Chairman, GFH, said:

"I am pleased that the bank has been generating a consistent stream of earnings for its shareholders. This is in line with the Board's vision and directives to have sustainable growth in earnings and balanced growth in assets."

"Though traditionally, the third quarter of the year is a relatively quiet period due to the holiday season, however, our results show strength in many areas due to the implementation of our unique business model aligned to current market conditions and the dedication and hard work of the bank's team."

Dr. Al-Omar said that the bank has had a particularly busy third quarter and the highlight of the period was the conclusion of the deal for the development of the first phase of the Energy City - Qatar, located in Doha, a project phase with a value of US$ 1.6 billion, which was underwritten by a group of GCC investors that included among others financial institutions.

"Clearly, market conditions continue to be very buoyant and we have a number of new infrastructure projects as well as private equity deals in the pipeline the concepts of which are well developed and will be launched soon in the GCC and in the wider MENA region in 2006," he said.

Dr. Al-Omar said that a major share of the bank's earnings this year have come from investment banking fees and realized gains on sale of the bank's projects and investments. "This shows that the bank's earnings were not derived from unrealized equity market gains. Therefore, we expect that 2005 will be another very successful year for Gulf Finance House."

He said the bank's plans to diversify its activities through expanding treasury and asset management capabilities were well under way, with the objective to deliver sustained earnings growth for shareholders and higher yielding investment opportunities to clients. "We are also currently examining a proposal to increase our share capital by the end of this year to support our plans for future growth through a rights issue restricted to the existing shareholders."

Commenting on the results, Mr. Esam Janahi, said: "Once again the results emphasise the confidence of our clients in our ability to create value for them. The pace of activity this quarter has been tremendous. There have been some very important milestones. For our clients who invested in our Legends project in Dubai, we are very pleased with the signing of this contract for residential and commercial property, which resulted in a 20% revenue gain for our shareholders, and the opening of the Legends Headquarters and Sales Centre at Dubailand."

During the third quarter, GFH also successfully exited from Costa Coffee business rewarding its regional investors with a return of 65 % over a three-year holding period. Other highlights during the period include the launch of the US$ 400 million Al Basha'er GCC Equity Fund and the bank's successful participation in Cityscape 2005, the regional property show in Dubai.

"A major achievement this quarter was the conclusion of the sale of three clusters in the Al Areen development in Bahrain to a joint venture led by Bayan Investment Company of Kuwait. This joint venture also purchased the residential south development parcel of the Bahrain Financial Harbour which is now a very prominent suite of towers and buildings that are noticeably changing the city skyline in Manama, " Mr. Janahi said.

"Achieving such growth comes with great challenges which require the GFH team to continually re-organise and re-engineer itself. We are doing this successfully through our policy of only recruiting seasoned professionals and employing renowned international consultants."

The third quarter performance also include the results of GFH Commercial Bank (GFHCB), the wholly-owned onshore commercial banking subsidiary of GFH, which reported a profit of US$7 million. GFHCB has been very active during the period and has successfully established its franchise. It has already sold 70 % of the 140, 000 square metre private themed residential community development, Oryx Hills, in Al Areen. In the fourth quarter it is also expected that GFHCB will move to new offices in Al Zamil Tower in Manama.

GFHCB is a wholly-owned bank that commenced operations in December 2004 and is licensed to provide real estate based investment products and financing in Bahrain and elsewhere.

"We anticipate that the pace of activity will in fact accelerate in the fourth quarter of the year and we are confident that GFH will close the year with another round of record profits," Mr. Janahi added.