Bahrain-based investment house Arcapita said it has recorded a loss of $190.7 million  for the six months ending December 31, 2009, attributable largely to the write down of $168.2 million on the portfolio.

The Islamic investment company's net operating income for the first half (July-December) of its fiscal 2009-2010 stood at $42.8 million. Total assets as of December 31, 2009 touched $4 billion, and total equity stood at $1.4 billion, Arcapita said in a statement.

The balance sheet leverage was 1.81, investment leverage stood at 1.75 and the bank’s capital adequacy ratio stood at 15.4 per cent, the company said in a statement.

Arcapita said all of its key balance sheet indicators remained within the limits set by its lenders and by the Central Bank of Bahrain.

'As a result of the challenges presented by the economic downturn, transaction-based income has fallen sharply in each of our lines of business,' the statement said.

"We expect this trend to reverse once the investment environment improves. In the meantime, we have successfully deleveraged our balance sheet, at the same time as supporting our portfolio, through several successful fundraising initiatives,' it added.

Given the depth and extent of the economic slowdown, Arcapita’s portfolio has, in general, held up relative to the overall market, the company said.

"However, as a result of the continuing uncertainty, and consistent with our conservative approach to valuation, we wrote down the portfolio by $168.2 million over the 6-month period, representing 5.6 per cent of total portfolio value," it said.

On the 2010 outlook, Arcapita said the economic downturn is receding, but more slowly than was anticipated in the closing months of 2009.

'We are beginning to see signs of growth, and investor confidence is starting to return. We are working closely with our investors in adapting our product offering according to changing preferences, as evidenced by the launch of a new $500 million real estate fund in partnership with Al Rajhi Capital from Saudi Arabia,' the statement said.

"While the return to profitable growth will take longer than expected, we continue to believe that once the environment improves, we will be well placed to use the quality and extent of our resources to benefit from the opportunities that arise," Arcapita added.-TradeArabia News Service