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

GFH posts 16.7pc surge in H1 net profit to $72.5m

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

GFH fully settles $200m sukuk

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

GFH to buy UAE lifestyle tech platform Entertainer

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
GFH Sector Market
P/E
Price/BookValue
Dividend Yield (%)
Relative Strength
  • 1-Month
  • 3-Month
  • 1-Year
Volume Change
  • 10D Avg Vs 90D Avg
Price Vs…
  • 52-w high
  • 50-day moving avg.
  • 200-Day Moving Avg
Ticker Price Change
UGH 1.12 0.00 (0.00%)
ABC 0.38 0.00 (0.00%)
INVCORP 9.60 0.00 (0.00%)
BARKA 0.30 0.00 (0.00%)
BCFC 0.74 -0.01 (-1.34%)
Bahrain's Investcorp records $165m loss for 2019-20 financial year

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

Aramex's revenue surges 4pc to $359m in Q2

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

Abu Dhabi's Waha Capital trims first-half 2020 attributable losses to Dh27.2m

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

FAB issues Formosa bond globally

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

Etisalat to pay out Q2 interim dividends from August 11

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