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

The specs

Engine: 6-cylinder, 4.8-litre
Transmission: 5-speed automatic and manual
Power: 280 brake horsepower
Torque: 451Nm
Price: from Dh153,00
On sale: now

Company Profile

Company name: Hoopla
Date started: March 2023
Founder: Jacqueline Perrottet
Based: Dubai
Number of staff: 10
Investment stage: Pre-seed
Investment required: $500,000

COMPANY PROFILE

Company name: Almouneer
Started: 2017
Founders: Dr Noha Khater and Rania Kadry
Based: Egypt
Number of staff: 120
Investment: Bootstrapped, with support from Insead and Egyptian government, seed round of
$3.6 million led by Global Ventures

Our family matters legal consultant

Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

The specs

Engine: 1.8-litre 4-cyl turbo
Power: 190hp at 5,200rpm
Torque: 320Nm from 1,800-5,000rpm
Transmission: Seven-speed dual-clutch auto
Fuel consumption: 6.7L/100km
Price: From Dh111,195
On sale: Now

Scoreline

Arsenal 0 Manchester City 3

  • Agüero 18'
  • Kompany 58'
  • Silva 65'
Company Profile

Company name: Cargoz
Date started: January 2022
Founders: Premlal Pullisserry and Lijo Antony
Based: Dubai
Number of staff: 30
Investment stage: Seed