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Gulf Finance House Reports $54 Million Loss

DUBAI - Bahrain-based Gulf Finance House, or GFH, which plans a capital increase of up to $300 million, missed analysts’ forecast and reported its third consecutive quarterly loss due to provisions and a slump in income from investment placements.

GFH declared a net loss of $54 million in the second quarter, compared with a net profit of $104 million a year ago.

Analysts at SICO investment bank expected a quarterly net loss of $30 million in a Reuters survey last month. Income from placing investments fell to $18 million in the second quarter from $199 million, the bank said in an emailed statement. The bank has appointed Bank of America-Merrill Lynch to advise on a plan to boost capital by $300 million. Gulf Finance also hired KPMG International to manage the offering of stock to existing shareholders, the bank said.

The bank said it had reduced operating costs by 60 per cent year-on-year during the second quarter.

“During the second quarter of the year we’ve focused not only on the origination of new projects, but increasingly on the management and oversight of existing initiatives,” Chairman Esam Janahi said in the statement. Total provisions for the quarter reached $38 million, showing writedowns of investments and receivables, it said in 
the statement.

Capinnova Investment Bank

Meanwhile, Bahrain-based Capinnova Investment Bank, a newly established Shari’a compliant investment banking arm and fully owned subsidiary of BBK, has reported gross revenue of $1.17 million for second quarter of 2009 in comparison to $90,000 from same quarter last year. The net loss reported for the second quarter 2009 was $821,000 as compared to $481,000 same quarter last year.

For the first half year ending June 2009 bank’s gross revenue stood at $1.5 million as compared to $230 thousand in June 2008.

· abdulbasit@khaleejtimes.com