Esam Janahi, the chairman of Gulf Finance House, says they have conducted a thorough review of their cost base and successfully reduced expenses by 20 per cent.
Esam Janahi, the chairman of Gulf Finance House, says they have conducted a thorough review of their cost base and successfully reduced expenses by 20 per cent.

Gulf Finance House narrows its full-year loss to $349m



Bahrain's Gulf Finance House (GFH) said yesterday it lost US$349 million (Dh1.28 billion) last year as it continued to reconfigure its business model and stabilise its balance sheet.

That loss still represented an improvement on 2009, when GFH, one of the regional investment houses hit hardest by the financial crisis, lost $728m.

The narrowed loss stemmed from reduced costs and about $300m raised from asset sales, the company said.

"We have continued a prudent and far-reaching review of all of our assets, made provisions where appropriate and successfully exited some of our investments," said Esam Janahi, GFH's chairman.

"In tandem, we have conducted a thorough review of our cost base and successfully reduced expenses by 20 per cent, or $25m, across the bank."

GFH was one of the Gulf's boldest players during the global boom in financial markets, leveraging strong investor sentiment and high regional liquidity to launch multibillion-dollar property and industrial developments in locations including Bahrain, Qatar, India and Libya.

It began posting heavy losses and was forced to change the way it did business after the financial crisis undercut a model that relied on collecting premiums from investors in huge property and private-equity deals. Many of those big projects have yet to get off the ground, but the company has said it is committed to honouring its obligations to investors.

Since the onset of the crisis, GFH has begun a transition to specialising in launching Islamic financial institutions in the region.

It has begun selling assets acquired during the boom, including its stake in the Bahrain Financial Harbour, its share of the Qatari investment bank QInvest and part of a Saudi property company.

GFH has also made strenuous efforts to reduce debt through negotiations with lenders. Last year it repaid $200m of debt and extended the maturity of $100m of debt until as late as 2013.

Those moves left GFH's assets at about $1bn at the end of last year, the company said. Its liabilities were reduced from about $1.2bn to $900m last year.

GFH also said yesterday it had received more than $100m in commitments to fund a recapitalisation agreed on in November. The board of directors voted to consolidate the company's shares and raise up to $500m to finance the new business model. GFH is listed in Bahrain but has cross-listings on the Dubai Financial Market and the Kuwait Stock Exchange.

"Our priorities at GFH are now very clear, namely to grow revenues, maximise efficiencies and continue to monitor and minimise costs," Mr Janahi said.

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