Bahrain’s GFH full-year profit slides amid Covid 19 pandemic

Investment bank grew assets under management by 20% last year to more than $12bn

Bahrain's GFH Group on Tuesday said its real estate income in 2020 fell 52 per cent to $19.4 million. Getty

Bahrain’s GFH Financial Group reported a 32 per cent drop in full-year profit as income from real estate, proprietary and co-investments plunged amid a coronavirus-induced economic slowdown.

Net profit attributable to shareholders of the investment bank for the period ending December 31, 2020 declined to $45.1 million, GFH said in a statement to the Dubai Financial Market, where its shares trade. Real estate income fell 52 per cent year-on-year to $19.4m, while total expenses climbed 2 per cent to $274m.

Income from proprietary and co-investments also declined by 30.4 per cent to $29.2m, although the company had benefited from restructuring-related income of $29.4m in the prior year.

“We remain pleased with our overall performance and ongoing diversification, which has enabled the group not simply to weather this storm but to continue to make strides across the business and deliver another solid dividend for our shareholders even in the toughest of years,” Jassim Alseddiqi, chairman of GFH, said.

“While net profit for the period was impacted by disruptions to businesses and markets in the region and around the world, we… maintained strong levels of income generation.”

The group’s net profit in the fourth-quarter jumped to $22m from $1.5m in the same period a year earlier. The prior year's fourth-quarter results included a significant impairment provision in the lender's commercial banking subsidiary.

Total assets and funds under management (AUM) increased 20 per cent year-on-year to over $12 billion, driven by growth in its treasury portfolio and inorganic growth through acquisition. In December, the company acquired Roebuck Asset Management, a UK company that manages about £684m ($953.3m) worth of warehouse and logistics space.

During the year, the company made more than $208m worth of new investments in different markets including the UK, the US and Europe.

“The investments we have made in 2020 have proven highly attractive and sought after by our regional investors, who have exhibited a strong appetite for GFH’s products and great confidence in the unique deals we were able to deliver even under considerable market strain,” Hisham Alrayes, chief executive of GFH, said.

The company has "entered 2021 in a very solid position with everything we need to continue to build and diversify our business and keep delivering solid returns and value to our investors and shareholders," he said.

"We have already begun to convert promising opportunities we have identified, having come into the year with a strong and growing pipeline of new opportunities.”