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GFH records $49.1mn profit for the first half of 2019

GFH records $49.1mn profit for the first half of 2019

Manama: GFH Financial Group (GFH) announced its results for the first six months of 2019 ended 30 June 2019. For the period, the group reported a 21.9% increase in revenues, which reached $163.5 million compared with $134.1 million in the first half of 2018.

For the second quarter of 2019, revenues rose 34.4% to $92.9 million versus $69.1 million in the second quarter of 2018. Excluding the one-off recovery income and restructuring income in the first half of 2018, the total income of the group for the first half of 2019, grew by 114.3% compared to the comparative period.

Net profit attributable to shareholders for the first half of 2019 was $49.1million compared with $72.5 million in the prior-year period, a decrease of 32.3%. However, excluding the one-off recovery income and restructuring income in the first half of 2018, net profit attributable shareholders grew by 234.0% in the first half of 2019 compared to the first half of 2018. The group reported a consolidated net profit of US$48.4 million, compared with $73.4 million in the first half of 2018, a decrease of 34.1%. For the first half of the year, the decrease in net profits is attributed to lower contribution from the group’s commercial banking arm due to higher impairment provisions at the commercial bank during the second quarter of 2019. Net profit attributable to shareholders for the second quarter of 2019 was $27.8 million versus $36.0 million in the second quarter of 2018, a decrease of 22.8%. Consolidated net profit for the second quarter was $27.7 million compared with $36.5 million in the second quarter of 2018, a decrease of 24.1%. Profit from continuing operations for the first half of 2019 was $48.9 million compared to $70.5 million in the prior year comparative period, a decrease of 30.6%, and for the second quarter of 2019 was $ 27.7 million compared to $ 34.7 million in the second quarter of 2018, a decrease of 20.2%.

Contributing to strong income growth for the first half of 2019 was the enhanced performance across the group’s core investment banking and real estate business lines in addition to income from the treasury and proprietary investments. During the first half of 2019, investment banking contributed 26.6% to the total income of the Group mainly from placement activities. The group’s strategy for its Treasury business line has shown significant improvement with Treasury contributing to 15.8% of the total income while a solid performance from proprietary investments generated 24.5% of the total income and real estate 9.1% for the first half of 2019. Commercial banking contributions were low due to provisions.

Total expenses including provision for impairment for the six- month period of 2019 were at $114.7 million compared to $63.7 million in the comparative previous period, an increase of 80%, primarily due to an increase in the impairment provisions in the commercial banking business of 99% and an increase in the treasury portfolio of the Group. Total expenses including provisions for impairment for the second quarter of 2019 were $65.2 million compared to $34.4 million in the comparative prior-year period, an increase of 89.5%. Financing costs saw a gradual reduction over the period to US$3.0 million in the first half of 2019 from US$ 3.8 million during the first half of 2018. An increase in the money market as part of the Group’s growing treasury portfolio and increased revenue generation from that business line also led to an increase in related costs from US$11.7 million during the first half of 2018 to US$50.7 million during the first half of 2019.

Operating expenses for the period were US$48.8 million compared with US$42.5 million in the first half of 2018, an increase of 14.8%. For the second quarter, operating expenses were US$26.9 million versus US$21.8 million in the prior-year period, an increase of 23.4%.