Second-quarter net profit for Bahrain's GFH more than doubles to $21m

Growth driven by group's commercial and investment banking as well as income related to financing and debt portfolios

Bahrain-based GFH's total assets reached $7.06 billion as of June 30th, 2021. Getty

GFH Financial Group, an investment bank based in Bahrain, more than doubled its net profit for the second quarter of 2021, driven by growth across its business units despite the ongoing impact of the Covid-19 pandemic globally.

Net profit attributable to the shareholders of the bank in the three months to June 30 jumped 109.8 per cent to $20.92 million, up from $9.97m for the second quarter of 2020, GFH said on Thursday. Total income for the quarter rose 17.6 per cent year-on-year to $90.62m.

"Supporting the strong increase in income were contributions from our commercial banking business, our investment banking as well as income related to financing and debt portfolios held by the group," said Hisham Alrayes, chief executive of GFH.

Total expenses for the second quarter rose 3.7 per cent to $65.82m, up from $63.46m in the comparative period of 2020.

GFH's profit for the quarter rose with higher income generated from the group's investment banking and placement activities, its financing portfolio and treasury income as well as higher contributions from its increased stake acquired during the quarter in Khaleeji Commercial Bank, the group’s commercial banking subsidiary.

In June 2021, GFH said it plans to fully acquire Khaleeji after it raised its stake in the Sharia-compliant lender to more than 69 per cent.

Net profit attributable to shareholders for the first half of 2021 more than doubled to $37.04m, up 146 per cent from $15.05m a year earlier, GFH said.

First-half profit was boosted by increased treasury activities and stronger performance by the commercial banking subsidiary of the group.

Total income for the first half of 2021 rose 23.5 per cent to $181m from the same period in 2020, as the group's core business units registered growth.

GFH's total assets stood at $7.06 billion as of June 30 this year, 7.1 per cent higher than that recorded at the end of 2020, it said.

“Our results for the second quarter and first half of the year reflect the continued success of our strategy and focus on growth, diversification and expansion across core business lines and geographies for the group," Mr Alrayes said.

"We also greatly benefited from the sale of equity investments and treasury income realised from sukuks, notes and fixed income, a fast-growing part of our business and a steady contributor to the vastly improved income and profitability delivered for the period."

In June 2020, GFH completed the issuance of its $500m sukuk programme after selling the remaining amount of $200m. That deal came after a $300m Islamic bond the company sold in January 2020. The five-year sukuk was two-and-a-half times oversubscribed, with the order book exceeding $750m.

Mr Alrayes said the company intends to maximise "the strong pipeline of opportunities we have in place".

GFH offers investment management services to its clients and has interests in commercial banking, real estate development and treasury and proprietary investments.