Bahrain-based Gulf Finance House (GFH) outlined its future growth strategy at a key investors' meeting and also updated them on the positive progress achieved after the recent restructuring plan.

The investors were also updated on GFH’s activities and financial performance during 2010 in relation to market conditions, along with the measures taken to adapt to the economic environment and return to profitability and growth.

At the company's meeting, the shareholders approved the corporate governance report and the board’s report on GFH’s business activities and audited financial statements for the year ending December 31, said Esam Janahi, GFH executive chairman.

In addition, decisions were also taken on the formation of a new board for the bank for the next three years (2011-2014).

On the success, Janahi said, 'We are pleased with the significant progress achieved upon executing our recovery plan. As part of this plan, GFH adopted a prudent approach to improve liquidity position and place the bank on a solid path towards growth.'

'As the bank steered ahead and adhered to this plan it has achieved a healthier balance sheet,' he added.

Outlining the bank's priorities, Janahi said the GFH has set clear aims to grow revenues, maximize efficiencies and return to profitability.

Several recovery steps were taken including successful exit of some non-core assets such as Bahrain Financial Harbour, Qinvest and Saudi Real Estate Company with cash and assets proceeds reaching $300 million, absorbing all provisions to clear the balance sheets.

According to him, GFH also cut operating costs down to bare minimum and pushed the debt maturity profile to 2012 and 2013. 'We have begun to see positive results and look forward with full optimism to the remainder of 2011 and beyond,” he added.

During last year’s AGM, GFH has presented its plans to improve the bank’s capital structure, strengthen its balance sheet and raise funds to pursue its growth strategy where resolutions were approved by the shareholders, said the bank chief.

'The resolutions covered a 4:1 share consolidation and other capital reduction measures including raising up to $500 million through a convertible murabaha to strengthen the Bank’s capital base and fund its growth strategy, and  acquiring  an additional 10 per cent stake in Khaleeji Commercial Bank.'

In relation to this, GFH has received participations of $120 million towards its recapitalization plan and is anticipating receiving additional participation during the course of this year which reflects the solid confidence of the shareholders and investors in the bank’s future.
 
In tandem with the restructuring plan, GFH also adopted a new business model aimed at further improving its balance sheet and concentrating on core assets.

The key driver for this new business model will be the re-dedication to GFH’s core strength – successfully conceptualizing, developing and managing a diverse range of pioneering Islamic financial institutions that offer a range of services to retail and corporate clients, said Janahi.-TradeArabia News Service