GulfBase Live Support
26/09/2017 14:37 AST
Capital Intelligence Ratings (CI Ratings or CI), the international credit rating agency, today announced that it has affirmed GFH Financial Group’s (GFH or the Bank) Long-Term Rating at ‘BB’ and the Short-Term Rating at ‘B’.
The Outlook for GFH’s ratings remains ‘Stable’. The ratings are supported by the Bank’s successful implementation of its recent strategy to convert to a financial group, improved and satisfactory liquidity, low debt and leverage, and increased profitability at both the operating and net levels in H1 2017. The Bank’s focus on income-generating investments, planned acquisition of financial services assets and value-accretive exits are expected to reduce earnings volatility in the future. The major constraining factors are Bahrain sovereign risk (Bahrain ratings ‘BB+’/’B’/’Stable’), and the increased and high concentration particularly in the real estate sector. The other constraining factor is the drop in capital adequacy in H1 2017 due to considerable growth in total risk weighted assets (RWAs). However, the capital adequacy ratio (CAR) remains satisfactory and management is expecting to monetise a part of its education portfolio investments during the second half of 2017, which will lift CAR. The challenging regional economic environment and increased credit risk driven by the fall in oil prices remains another constraining factor.
GFH has made considerable progress on its communicated strategy of 2014-2017, which involved transforming from a pure investment bank to a fully integrated financial group. The Bank has increased its stake in its commercial banking subsidiary, Khaleeji Commercial Bank, as well as modified its strategy within investment banking to focus on cash-yielding private equity businesses within stable sectors such as healthcare, education and consumer retail, as well as income-producing real estate assets across the US & Europe. GFH also owns a significant land bank, comprising prime properties across the GCC, Africa and India and is aiming to monetise values by employing a capital-light model alongside key JV partners and contractors.
GFH’s balance sheet liquidity has increased to a satisfactory level in recent periods, notwithstanding a marginal decline in the net liquid asset ratio in H1 2017. More positively, GFH’s debt service capacity has improved as borrowings are paid down and/or refinanced. As a matter of internal policy, GFH has curtailed new borrowings as clearly evidenced by the low levels of debt. Leverage also continued to be maintained at a rather conservative level as indicated by the ratio of total debt to total capital.
In March 2017 the board of directors approved the increase in GFH’s authorised share capital to $2.5 billion from $1.5 billion. In turn, GFH launched a strategic initiative to issue new shares for the acquisition of a number of infrastructure projects. The infrastructure shareholders’ holdings were acquired in return for a pre-determined number of GFH shares. As a result of these acquisitions in H1 2017, concentration in development properties (real estate) – mostly in India, Africa and the GCC - increased significantly due to the consolidation of these entities. In turn, the already high sector concentration risk particularly to the real estate sector rose further. With GFH now firmly in control of these projects, the Bank does not rule out an opportunistic sale of these assets over the medium term. The current strategy is to proceed with the development of the projects but with minimum injections of cash by partnering with reputable contractors to develop the land bank in exchange for a revenue share.
CPI Financial
14/08/2018
Bahrain-based GFH Financial Group (GFH) has reported a net profit attributable to shareholders of $72.5 million for the first half of the year representing a 16.7 per cent increase from $62.1 million
Trade Arabia
30/07/2018
Gulf Finance House said on Sunday it has fully settled its $200 million (Dh734 million) sukuk, which was originally drawn in 2007. The facility,which was payable over several tranches with final matu
Gulf News
30/07/2018
Bahrain-based GFH Capital, a leading financial group in the region, has reached an agreement with leading UAE conglomerate Al Futtaim to complete the landmark acquisition of the Entertainer, one of t
Trade Arabia
Ticker | Price | Volume |
---|
06/08/2020
Bahrain’s Investcorp slipped into a $165 million loss for the 12 months ended June 30, against profits of $131 million a year ago.
The COVID-19 played its part in the loss, as fee income c
Gulf News
06/08/2020
Aramex, a leading provider of logistics and transportation solutions, has registered a 4 per cent growth in its revenues for the second quarter which surged to hit AED1.32 billion ($359 million), com
Trade Arabia
05/08/2020
Abu Dhabi based investment company Waha Capital recorded a net loss of Dh27.2 million - attributable to shareholders - for the first six months of 2020, an improvement on the Dh124.38 million it rec
Gulf News
05/08/2020
First Abu Dhabi Bank (FAB), recently announced the issuance of the largest-ever Chinese Yuan (CNH) denominated dual-listed Formosa bond globally, with a CNH 3.25 billion five-year issuance.
The Gulf Today
05/08/2020
UAE's leading telecom services operator Etisalat Group has announced that the interim dividend of 15 fils per share for the second quarter will be paid out starting from August 11 through the First A
Trade Arabia