MANAMA: GFH Financial Group (GFH) reported net profit of $21.93 million for the fourth quarter of 2020 compared with $1.5m in the fourth quarter of 2019, an increase of 1,362 per cent.
Previous year fourth quarter results included a significant impairment provision in the commercial banking subsidiary of the group.
Earnings per share for quarter was 0.65 cents compared to 0.04 cents for the comparative quarter of 2019.
Consolidated net profit for the fourth quarter was $19.04m compared with losses of $8.1m in the fourth quarter of 2019.
Net profit attributable to shareholders was $45.1m for the full year compared with $66.03m in 2019, a decrease of 31.7pc.
The decline is predominantly attributable to slower contribution from business lines as a result of the pandemic situation during the year.
Earnings per share for the year was 1.35 cents compared to 1.96 cents for 2019.
Consolidated net profit for the year was $49.34m compared with $53.12m in 2019.
Total equity was $0.913 billion from $1bn at year-end 2019, a decrease of 8.7pc.
The drop was primarily due to the 2019 dividends payout, mark to market changes on treasury portfolio, and additional capital contribution to the group’s commercial banking subsidiary.
Total assets of the group were $6.59bn at end-2020 compared with $5.95bn as of end-2019, an increase of 10.8pc.
Total assets and funds under management (AUM) increased from $10bn in 2019 to over $12bn in 2020, marking a year-on-year increase of 20pc, primarily from the growth in the treasury portfolio of the group along with inorganic growth through acquisition.
Total income for the fourth quarter was $109.29m compared with $76.62m for the fourth quarter of 2019, an increase of 42.6pc.
This was achieved despite an impairment loss of $12m from an equity investment.
Total income for the year was $323.39m versus $321.61m in 2019, an increase of 0.6pc. This is the result of ongoing contributions from all business lines despite difficult market conditions that persisted throughout 2020. While major contributions came from strong income generation from investment and advisory activities.
During the quarter, investment banking income included income from placement of the group’s investment in Hidd Mall in Bahrain, its second LuLu anchored retail centre asset, and from its investment in two strategically located Amazon designated logistics warehouses in Spain.
Other income of note was gains in the Group’s treasury portfolio, which benefited from the continuing recovery in the global equity markets, and income from the reversal of liabilities resulting from a successful conclusion of litigation.
Expenses for the fourth quarter were $90.26m compared with $84.72m in the fourth quarter of 2019, an increase of 6.5pc.Total expenses for the year were $274.05m compared with $268.03m in 2019, an increase of 2.2pc.
In line with the results, the board has recommended total dividend of $42m at 4.60pc on par value, divided into 1.86pc cash dividends amounting to $17m and 2.74pc stock dividend of $25m.
Commenting, GFH chairman Jassim Alseddiqi said, “2020, despite its exceptional challenges and the unprecedented global turmoil caused by the Covid-19 pandemic, has helped GFH to test and confirm the strength and resilience of the group, our strategy and business model.
“We remain pleased with our overall performance and ongoing diversification, which has enabled the group to not only weather this storm but also continue to make strides across the business and deliver another solid dividend for our shareholders even in the toughest of years,” Mr Alseddiqi said.
“While net profit for the period was impacted by disruptions to businesses and markets in the region and around the world, we are pleased to have maintained strong levels of income generation even reporting a moderate increase for the year.
“We’re especially pleased with the momentum gained as we closed out the year, which has been successfully carried over into 2021 and on which we will continue to build.”
GFH chief executive Hisham Alrayes said, “As we look back on what was no doubt the most challenging year faced by governments, businesses and citizens around the world, we’re very proud of how we’ve performed.
“During the year, we made more than $208m of new investments leveraging our strong liquidity. These investments saw us expand our existing global portfolios in the Mena region, the US and UK as well as conclude our first investment in Europe. Outside our core investment banking business, we continued to make progress in other lines. During the year, we effectively restructured our commercial banking subsidiary, Khaleeji Commercial Bank, saw positive movement in our treasury business, which continues to expand, and strengthening in real estate operations – all of which delivered positive contributions supporting growth in income for the year.
“We believe, even despite the ongoing pain of the pandemic, that we have entered 2021 in a very solid position. We have already begun to convert promising opportunities we have identified, having come into the year with a strong and growing pipeline of new opportunities. We are looking positively to the future and to keeping the market updated on activities across our core business lines.”
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