Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Net profit attributable to shareholders increased by 11.4% to USD60.8 million compared to the first half of 2023.
- Consolidated net profit for the first half of 2024 rose by 18.7% to USD67.9 million.
- Total income for the six-month period grew by 53.7% to USD332.2 million.
- Earnings per share increased by 9.7% to USD0.017 per share.
- The group's capital adequacy ratio stands at a robust 18%, with a liquidity coverage ratio of 240%.
Negative Points
- Total expenses, including impairment allowances, increased by 40.5% to USD163.8 million.
- The group's total assets dropped by 2% from the 2023 year-end.
- Total equity attributable to shareholders decreased from USD990 million at December 31, 2023, to USD969 million at the end of the second quarter of 2024.
- Higher finance expenses due to the unfavorable Fed rate cycle impacted overall expenses.
- There are no current plans for capital increase despite ongoing listing plans for the Saudi stock exchange.
Q & A Highlights
Q: The group is planning listing of shares in Saudi stock exchange. Are you considering capital increase taking into consideration authorized capital?
A: Currently, we do not have any plans of capital increase. The plan for listing on the Saudi stock exchange is ongoing. We are in touch with our advisors and will announce updates to the market as soon as available.
Q: GFH reduced its ownership in Khaleeji Bank through conversion of ownership certificates. How does this affect risk-weighted assets and capital adequacy?
A: The capital adequacy currently stands at 18.1%. Selling these assets will change risk-weighted assets, but Khaleeji Commercial Bank remains a subsidiary, affecting the minority interest portion and having a smaller impact on capital adequacy ratios.
Q: Does income from the treasury segment, including real estate divestitures, involve financial tools to moderate profit recognition?
A: Our strategy is to monetize real estate assets where possible and hold onto those with potential for development and value addition. The income from real estate sales can vary each quarter based on opportunities.
Q: What is the reason for the increase in expenses of the group?
A: The increase in expenses includes higher finance expenses due to the unfavorable Fed rate cycle affecting the treasury portfolio.
Q: Are there any future plans to further reduce real estate concentration?
A: Yes, the Board's strategy is to actively reduce real estate exposure, and we are pursuing this plan.
Q: What is the update on the acquisition of assets from Ithmaar Bank?
A: There has been no formal disclosure beyond the last market update. Any new developments will be communicated to the market.
Q: What are the expectations for second-half profits?
A: We cannot provide forward-looking statements. However, we are focused on enhancing shareholder value and contributions.
Q: How did the group's financial performance fare in the first half of 2024?
A: The group achieved a net profit attributable to shareholders of USD60.8 million, up by 11.4% compared to the first half of 2023. Consolidated net profit was USD67.9 million, an increase of 18.7%.
Q: What were the main contributors to the group's income in the second quarter?
A: Investment banking contributed 26%, commercial banking 22%, and treasury and proprietary investments 52% to the total income for the quarter.
Q: What strategic initiatives is GFH pursuing?
A: We are focusing on strategic acquisitions to expand our investment portfolio in key global markets, enhancing shareholder value. We have also appointed liquidity providers for our shares listed on various exchanges.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
