Gulf Finance First-Half Loss Narrows to $47.7 Million as Expenses Decline

Gulf Finance House EC said its first-half loss narrowed after it cut costs and liabilities as the Bahrain-based investment bank restructures its business.

The loss was $47.7 million after $92.1 million in the year- earlier period, the Manama-based bank said in an e-mailed statement today. Expenses fell 54 percent to $73.6 million, while liabilities were reduced to $965 million at the end of June from $1.8 billion a year ago.

Gulf Finance is restructuring after the global financial crisis reduced lending, hurting companies and investors in the region. The company said Feb. 10 it repaid a $200 million loan to the group of 32 lenders led by WestLB AG. Gulf Finance this month reached an accord on a $100 million Islamic loan.

“Like every global investment bank GFH has had to review its business model, adjust its liquidity profile and reassess its investment projects,” Group Chief Executive Officer Ted Pretty said in the statement. GFH’s recovery plan and new strategy will position it “to capture the potential value of Islamic finance across the region and beyond,” he said.

Gulf Finance reduced its assets to $1.4 billion at the end of June compared with $2.7 billion a year ago as part of the restructuring plan, according to the statement.

The company is seeking to defer asset sales until the market improves, Pretty said on July 5. Gulf Finance will likely “break even” by the fourth quarter as operating and financing costs decline, and it plans to start an Islamic finance unit in the third quarter, Pretty said then.

Gulf Finance shares were unchanged at 14.5 cents on Aug. 15 when they last traded.

To contact the reporter on this story: Ayesha Daya in Dubai at adaya1@bloomberg.net

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