Commercial banking leads to loss at GFH



GFH fell into the red during the third quarter, as provisions at its commercial banking business increased significantly.

The Bahraini investment group reported a net loss of US$7.6 million for the three months to the end of September, compared with a profit of $761m for the same period last year.

GFH’s impairment allowances rose to $6.8m during the quarter from $1.2m a year ago, following a large increase in provisions announced last week by the Bahraini unit Khaleeji Commercial Bank (KHCB).

Last week, KHCB announced an 81 per cent fall in profits to 359,000 Bahraini dinars (Dh3.4m) for the third quarter, driven lower by Bahrain’s tightening economic climate.

GFH’s total income for the quarter dropped by 20 per cent year-on-year to $16m, thanks to foreign exchange losses and higher financing costs.

During the third quarter GFH offloaded its remaining 18 per cent stake in the English football club Leeds United to Eleonora Sport, the family trust of Massimo Cellino, for an undisclosed sum.

The group announced last month that its board has “resolved to approve the proposed settlements with assets of an estimated value ranging between $350m and $400m, subject to the counterparties’ fulfilment of their obligations under the settlement agreements and GFH’s collection of the assets”.

GFH said the estimated value of the assets is preliminary and subject to approval by auditors and regulators, but that the recoveries “will have a positive impact on GFH’s financials for Q4 2016”, giving no further details as to the parties involved.

Fitch Ratings last month revised its outlook for GFH upwards to positive from stable following steps by management to strengthen the firm’s balance sheet by paying down debt and reshaping the business model with a focus on income-generating investments.

GFH’s shares, listed on the Dubai Financial Market, fell 4.8 per cent to Dh1.58 yesterday. However, the group’s shares, one of the best performers on the Dubai exchange, remain up more than 200 per cent for the year to date.

Separately, unit GFH Capital announced yesterday an undisclosed investment in schools operator Ama Group.

jeverington@thenational.ae

Follow The National's Business section on Twitter

COMPANY PROFILE

Name: SmartCrowd
Started: 2018
Founder: Siddiq Farid and Musfique Ahmed
Based: Dubai
Sector: FinTech / PropTech
Initial investment: $650,000
Current number of staff: 35
Investment stage: Series A
Investors: Various institutional investors and notable angel investors (500 MENA, Shurooq, Mada, Seedstar, Tricap)

JOKE'S ON YOU

Google wasn't new to busting out April Fool's jokes: before the Gmail "prank", it tricked users with mind-reading MentalPlex responses and said well-fed pigeons were running its search engine operations .

In subsequent years, they announced home internet services through your toilet with its "patented GFlush system", made us believe the Moon's surface was made of cheese and unveiled a dating service in which they called founders Sergey Brin and Larry Page "Stanford PhD wannabes ".

But Gmail was all too real, purportedly inspired by one – a single – Google user complaining about the "poor quality of existing email services" and born "millions of M&Ms later".

SPECS

Engine: Supercharged 3.5-litre V6
Power: 400hp
Torque: 430Nm
On sale: Now
Price: From Dh450,000