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95HX Gfh Sukuk 25

0.00
0.00 (0.00%)
Name Symbol Market Type
Gfh Sukuk 25 LSE:95HX London Bond
  Price Change % Change Price Bid Price Offer Price High Price Low Price Open Price Traded Last Trade
  0.00 0.00% 0 -

GFH Financial Group B.S.C 3rd Quarter Results

12/11/2024 3:52pm

RNS Regulatory News


RNS Number : 9548L
GFH Financial Group B.S.C
12 November 2024
 

 

GFH FINANCIAL GROUP BSC

 

CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

 

30 September 2024

 

 


 

 

    Commercial registration                     :     44136 (registered with Central Bank of Bahrain

                                                                  as an Islamic wholesale Bank)

 

    Registered Office                              :     2nd Floor, Harbor House

                                                                  Building Number 1436

                                                                  Block: 346, Road: 4626                              

                                                                  Manama, Kingdom of Bahrain

                                                                  Telephone +973 17538538

 

    Directors                                          :     Abdulmohsen Rashed Alrashed, Chairman (from March 2024)

                                                                  Ghazi Faisal Ebrahim Alhajeri, Vice Chairman

                                                                  Hisham Ahmed Alrayes                               

                                                                  Ali Murad   

                                                                  Darwish Al Ketbi                             

                                                                  Fawaz Talal Al Tamimi

                                                                  Rashid Nasser Al Kaabi

                                                                  Yusuf Abdulla Taqi (till March 2024)

                                                                  Edris Mohd Rafi Mohd Saeed Al-Rafi (till March 2024)

                                                                  Abdulaziz Abdulhamid Albassam (from March 2024)             Abdulla Jehad Alzain (from March 2024)

                                                                  H.H Shaikha Minwa Bint Ali Bin Khalifa Al Khalifa (from March                                                                                   2024)

                                                                 

 

    Chief Executive Officer                     :     Hisham Ahmed Alrayes

                                                           

    Auditors                                           :     KPMG Fakhro

CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

for the nine months ended 30 September 2024                                                                               

 

 

 

CONTENTS                                                                                                                  Page

 

 

Independent auditors' report on review of condensed consolidated interim financial

information                                                                                                                         1

                                                                                                               

Condensed consolidated interim financial information

Condensed consolidated statement of financial position                                                   2

Condensed consolidated statement of income                                                                  3

Condensed consolidated statement of total comprehensive income                                 4

Condensed consolidated statement of income and attribution related to quasi-equity      5

Condensed consolidated statement of changes in owners' equity                                    6-7

Condensed consolidated statement of cash flows                                                             8

Condensed consolidated statement of changes in off-balance-sheet assets

under management                                                                                                             9

Notes to the condensed consolidated interim financial information                                 10-33

                                                                                                                                   

 

 

 


Independent auditors' report on review of condensed consolidated interim financial information

To the Board of Directors of

GFH Financial Group BSC

Kingdom of Bahrain

Introduction

We have reviewed the accompanying 30 September 2024 condensed consolidated interim financial information of GFH Financial Group BSC (the "Bank") and its subsidiaries (together the "Group"), which comprises:

 

·      the condensed consolidated statement of financial position as at 30 September 2024;

·      the condensed consolidated statement of income for the three-month and nine-month periods ended 30 September 2024;

·      the condensed consolidated statement of total comprehensive income for the three-month and nine-month periods ended
30 September 2024;

·      the condensed consolidated statement of income and attribution related to quasi-equity for the three-month and nine-month periods ended 30 September 2024;                     

·      the condensed consolidated statement of changes in owners' equity for the nine-month period ended
30 September 2024;

·      the condensed consolidated statement of cash flows for the nine-month period ended 30 September 2024;

·      the condensed consolidated statement of changes in off-balance-sheet assets under management for the nine-month period ended 30 September 2024; and

·      notes to the condensed consolidated interim financial information.

 

The Board of Directors of the Bank is responsible for the preparation and presentation of this condensed consolidated interim financial information in accordance with FAS 41, "Interim Financial Reporting". Our responsibility is to express a conclusion on this condensed consolidated interim financial information based on our review.

Scope of Review

We conducted our review in accordance with the International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.  A review is substantially less in scope than an audit conducted in accordance with Auditing standards for Islamic Financial Institutions and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying 30 September 2024 condensed consolidated interim financial information is not prepared, in all material respects, in accordance with FAS 41, "Interim Financial Reporting".

 

 

 

12 November 2024


CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 September 2024                                                                                                                US$ 000's

 


Note

30 September

2024


31 December 2023


30 September

2023



(reviewed)


(audited)


(reviewed)

ASSETS







Cash and bank balances


            379,284


376,884


446,249

Treasury portfolio

8

          4,532,623   


5,135,032


4,970,142

Financing contracts

9

          2,035,126  


1,544,810


1,558,802

Real estate investment

10

         1,199,880


1,371,932


1,333,373

Co-investments

11

           301,387   


254,610


182,134

Proprietary investments

12

          1,166,043  


 1,044,727


1,018,033

Receivables and other assets

13

          1,038,307      


825,331


817,497

Property and equipment


            286,805


229,534


215,832

Assets held for sale


            -


338,619


-

 

TOTAL ASSETS

 

10,939,455

 

11,121,479


10,542,062

 







LIABILITIES







Clients' funds


 240,757


206,222


106,631

Placements from financial institutions


 2,421,964


2,323,217


2,542,008

Placements from non-financial institutions and individuals


 1,149,476


960,050


1,112,894

Customer current accounts


 417,745


203,697


158,161

Term financing

14

 1,958,061


2,124,307


1,847,528

Other liabilities

15

  526,471  


548,056


596,089

Liabilities directly associated with assets held for sale


 -


230,562


-

 

TOTAL LIABILITIES


6,714,474


6,596,111


6,363,311

 

 






QUASI EQUITY

16

3,123,389


3,451,006


3,100,537

 

OWNERS' EQUITY







Share capital


1,015,637


1,015,637


1,015,637

Treasury shares


(73,865)


(125,525)


(124,672)

Statutory reserve


47,518


47,518


36,995

Investment fair value reserve


(18,008)


(46,103)


(56,885)

Cash flow hedge reserve


-


(2,135)


-

Other reserve


(17,888)


(13,612)


-

Retained earnings


38,211


105,831


115,165

Share grant reserve


5,440


7,930


7,930

Total equity attributable to shareholders of the Bank

 

997,045


989,541


994,170

Non-controlling interests


104,547


84,821


84,044

 

TOTAL OWNERS' EQUITY

 

1,101,592


1,074,362


1,078,214

TOTAL LIABILITIES, QUASI EQUITY AND OWNERS' EQUITY

 

10,939,455


11,121,479


10,542,062

The Board of Directors approved the condensed consolidated interim financial information on 12 November 2024 and signed on its behalf by:

 

 

 

 

Abdulmohsen Rashed Alrashed                                                                                     Hisham Alrayes

Chairman                                                                                                                       Chief Executive Officer & Board member

 

The accompanying notes 1 to 24 form an integral part of the condensed consolidated interim financial information.

CONDENSED CONSOLIDATED STATEMENT OF INCOME

for the nine months period ended 30 September 2024                                                                  US$ 000's                     

 

 



Nine months ended

 

Three months ended


Note

 

 

30 September

2024

(reviewed)

30 September

2023

(reviewed)

 

 

30 September

2024

(reviewed)

30 September

2023

(reviewed)

 

Investment banking







Deal related income


91,106

151,564


  31,204  

70,674

Asset management


42,084

14,706


  13,858  

5,079



133,190

166,270

 

45,062

75,753

Commercial banking







Income from financing


 92,599

81,913


 30,205

28,209

Treasury and investment income


 74,049

69,892


 24,756

24,428

Fee and other income


 19,510

18,597


 4,047

3,968

Commercial banking finance cost


 (77,115)

(80,290)


 (22,508)

(35,120)



 109,043

90,112


36,500

21,485

Treasury and Proprietary Investments







Finance and treasury portfolio income, net


 149,533

163,552


60,463

41,562

Direct investment income, net


 88,121

7,793


8,972

3,641

Income from co-investments


  42,291  

44,382


27,595

22,753

Share of profit from equity-accounted investees


 16,948

22,401


4,359

5,157

Income from sale of assets


 52,235

6,512


5,385

799

Leasing and operating income


 22,026

13,274


7,879

4,397

Other income


 8,111

8,346


6,398

6,006

Finance expenses - Repo and FI


 (135,012)

(182,243)


(48,357)

(57,368)



244,253

84,017


72,694

26,947

Total income


486,486

340,399


154,256

124,185








Finance expense - term financing and others


54,547

46,574


21,099

15,215

Impairment allowances, net

17

22,692

13,607


4,087

6,655

Other expenses


156,656

120,063


44,842

41,797

Total expenses


233,895

180,244


70,028

63,667








Profit for the period before attribution to quasi equity


252,591

160,155


84,228

60,518

Less: Net profit attributable to quasi-equity                                              


(157,035)

(79,106)


(56,569)

(36,658)

Profit for the period


95,556

81,049


27,659

23,860

 

Profit attributable to:






Shareholders of the Bank

  87,947  

78,921


  27,200  

24,305

Non-controlling interests

  7,609  

2,128


  459  

(445)

 

95,556

81,049


27,659

23,860

 






Earnings per share






Basic and diluted earnings per share (US cents)         18           

2.43

2.26


0.73

0.71

 

 

 

 

 

 

 

 

Abdulmohsen Rashed Alrashed                                                                                      Hisham Alrayes

Chairman                                                                                                                         Chief Executive Officer & Board member

 

The accompanying notes 1 to 24 form an integral part of the condensed consolidated interim financial information.

CONDESNED CONSOLIDATED STATEMENT OF TOTAL COMPREHENSIVE INCOME

for the nine months period ended 30 September 2024                                                                  US$ 000's                

 



Nine months ended

 

Three months ended



30 September 2024

30 September

2023

 

30 September

2024

30 September

2023



(reviewed)

(reviewed)

 

(reviewed)

(reviewed)

Profit for the period


95,556

81,049


27,659

23,860








Other comprehensive income (OCI)







Items that may subsequently be classified to income statement







Fair value changes on debt investments carried at fair value through OCI


32,499

756


26,489

(1,554)

Fair value changes on equity investments carried at fair value through OCI


(2,724)

(5,528)


(1,156)

(406)

Equity-accounted investees - share of OCI


(4,276)

-


(1,868)

-

Attributable to quasi-equity                               


(549)

-


(259)

-

Total other comprehensive income for the period


24,950

(4,772)


23,206

(1,960)

Total comprehensive income

 

120,506

76,277

 

50,865

21,900

 

 

 


 



Total comprehensive income attributable to:







Shareholders of the Bank


113,901

75,231


46,594

22,948

Non-controlling interests


6,605

1,046

 

4,271

(1,048)



120,506

76,277

 

50,865

21,900

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes 1 to 24 form an integral part of the condensed consolidated interim financial information.

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF INCOME AND ATTRIBUTION RELATED TO QUASI-EQUITY

For the nine months period ended 30 September 2024                                                                   US$ 000's                

 



Nine months ended

 

Three months ended



30 September

2024

30 September 2023

 

30 September 2024

30 September

2023



(reviewed)

(reviewed)

 

(reviewed)

(reviewed)

Net operating income attribution to quasi equity


252,591

160,155

 

84,228

60,518

Adjusted for:





 


Less: income not attributable to quasi-equity


    (227,107)

(262,087)


(74,582)

(77,722)

Add: Profit expense on due to banks and non-banks


89,045

80,289


28,101

28,066

Add:  expenses not attributable to quasi-equity


   227,328    

216,896


69,244

64,010

Less: institution's share of income for its own/ share of investments


 

(114,767)

 

(98,122)


 

(36,433)

 

(42,695)

Less: allowance for impairment allowances attributable to quasi-equity


 

4,884

 

-


(687)

9,611

Total income available for quasi-equity holders


231,974

97,131


69,871

41,788

Profit equalization reserve - net movement


-

-


-

-

Total income attributable to quasi-equity holders (adjusted for reserves)


231,974

97,131


69,871

41,788

Less: Mudarib's share


 

 

(6,069)

 

 

(13,503)


1,865

(5,130)

Less: Wakala fees


  (68,870)

 (4,522)


(15,167)

-

Net income attributable to quasi-equity

 

157,035

79,106

 

56,569

36,658

Investment risk reserve -net movement


-

-











Profit distributable to quasi-equity

 

157,035

79,106

 

56,569

36,658

Other comprehensive income that may subsequently be classified to statement of income


549

-


-

-

Total comprehensive income - attributable to quasi-equity


157,584

79,106


56,569

36,658

Add: Other comprehensive income not subject to immediate distribution


(549)

-


-

-

Net profit attributable to quasi-equity


157,035

79,106


56,569

36,658

 

 

 

 

 

 

 

The accompanying notes 1 to 24 form an integral part of the condensed consolidated interim financial information.


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN OWNERS' EQUITY                                                                                                                                                                                                                                                            

for the nine months period ended 30 September 2024                                                                                                                                                                                                                                                                                                  US$ 000's

 

 

Attributable to shareholders of the Bank

 

 

Total owners' equity

30 September 2024 (reviewed)

Share capital

 Treasury shares

 Statutory reserve

 

 

Cashflow hedge reserve

 

 

Other reserve

Investment fair value reserve

Retained earnings

Share grant reserve

Total

Non-Controlling Interests (NCI)





 

 

 






Balance at 1 January 2024              

1,015,637

(125,525)

47,518

(2,135)

(13,612)

(46,103)

105,831

7,930

989,541

84,821

1,074,362

Profit for the period

-

-

-

-

-

-

87,947

-

87,947

7,609

95,556

Other comprehensive income

-

-

-

2,135

(4,276)

28,095

-

-

25,954

(1,004)

24,950

Total comprehensive income for the period

 

 

 

2,135

(4,276)

28,095

87,947

-

113,901

6,605

120,506


 

 

 









Issue of shares under incentive scheme (net)

-

-

-

-

-

-

-

(2,490)

(2,490)

-

(2,490)

Transfer to zakah and charity fund

-

-

-

-

-

-

(7,037)

-

(7,037)

-

(7,037)

Dividends declared for 2023

-

-

-

-

-

-

(61,000)

-

(61,000)

-

(61,000)

Sale of treasury shares

-

279,044

-

-

-

-

(31,327)

-

247,717

-

247,717

Purchase of treasury shares

-

(227,384)

-

-

-

-

-

-

(227,384)

-

(227,384)

 

Additional NCI without a change in control (note 1)

-

-

-

-

-

-

(37,360)

-

(37,360)

124,650

87,290

 

Sale of shares in subsidiary

 

-

-

-

-

-

-

-

-

-

(39,757)

(39,757)

Reduction in NCI due to additional stake in subsidiary (note 1)

-

-

-

-

-

-

(18,843)

-

(18,843)

(84,059)

(102,902)

 

Additional NCI on acquisition of subsidiary (note 23)

-

-

-

-

-

-

-

-


12,287

12,287

 

Balance at 30 September 2024

1,015,637

(73,865)

47,518

-

(17,888)

(18,008)

38,211

5,440

997,045

104,547

1,101,592

 

 

 

 

The accompanying notes 1 to 24 form an integral part of the condensed consolidated interim financial information.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN OWNERS' EQUITY

for the nine months period ended 30 September 2024 (continued)                                                                                                                                                                                                                                                                                            US$ 000's

 

 

30 September 2023 (reviewed)

Attributable to shareholders of the Bank

 

 

 

Share capital

Treasury shares

Statutory reserve

Investment fair value reserve

Retained earnings

Share grant reserve

 

 

 

Total

Non-Controlling Interests

(NCI)

Total owners' equity





 






Balance at 1 January 2023

1,015,637

(105,598)

36,995

(53,195)

95,831

6,930

996,600

74,794

1,071,394











Profit for the period

-

-

-

-

78,921

-

78,921

2,128

81,049

Fair value changes during the period

-

-

-

(3,690)

-

-

(3,690)

(1,082)

(4,772)

 

Total recognised income and expense

-

-

-

(3,690)

78,921

-

75,231

1,046

76,277


 

 

 







Long Term Incentive Plan (LTIP)

-

-

-

-

-

1,000

1,000

-

1,000

Transfer to zakah and charity fund

-

-

-

-

(1,000)

-

(1,000)

-

(1,000)

Dividends declared for 2022

-

-

-

-

(56,261)

-

(56,261)

-

(56,261)

Purchase of treasury shares

-

(48,548)

-

-

-

-

(48,548)

-

(48,548)

Sale of treasury shares

-

29,474

-

-

(2,326)

-

27,148

-

27,148

Additional NCI without a change in control

-

-

-

-

-

-

-

12,164

12,164

Loss of control

-

-

-

-

-

-

-

(3,960)

(3,960)

 

Balance at 30 September 2023

1,015,637

(124,672)

36,995

(56,885)

115,165

7,930

994,170

84,044

1,078,214

 

 

 

 

 

The accompanying notes 1 to 24 form an integral part of the condensed consolidated interim financial information.

 

 

 


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS-

for the nine months period ended 30 September 2024                                                         US$ 000's

 

 

30 September 2024

(reviewed)

 

30 September 2023

(reviewed)

OPERATING ACTIVITIES

 

 


Profit for the period

95,556


81,049

Adjustments for:




Treasury and proprietary investments

(379,265)


(266,260)

Foreign exchange loss/ (gain)

2,941


(1,323)

Finance expense

346,594


307,923

Impairment allowances,net

22,692


13,607

Depreciation and amortisation

9,451


8,055


97,969


143,051

Changes in:




Placements with financial institutions (original maturities of more than     3 months)

(35,614)


(17,979)

Financing contracts

(494,275)


(128,727)

Receivables and other assets

(47,158)


(184,971)

CBB Reserve and restricted bank balance

(7,298)


(7,311)

Clients' funds

34,535


(16,669)

Customer current accounts

214,048


26,927

Placements from financial, non-financial institutions and individuals

288,173


(1,200,226)

Quasi Equity

(327,617)


1,886,863

Other liabilities

(283,180)


45,326

Net cash (used in) / generated from operating activities

(560,417)


546,284


 




 



INVESTING ACTIVITIES

 

 


Sale / (Payments) for purchase of equipment, net

1,629


(4,570)

Sale / (Purchase) of proprietary investment securities, net

21,210


(41,453)

Sale / (Purchase) of treasury portfolio, net

 38,989


(124,179)

Profit collected on treasury portfolio

 178,351


130,087

Cash acquired on acquisition of subsidiary

5,584


1,346

Cash paid on acquisition of subsidiary

(4,000)


(7,000)

Sale / (Purchase) of real estate

56,617


(623)

Dividends received during the period

80,721


49,207

Net cash from investing activities

379,101


2,815

 

 



 

 



FINANCING ACTIVITIES

 

 


Financing liabilities, net

(49,422)


(89,603)

Purchase of GFH sukuk, net

(556)


(21)

Finance expense paid

(329,934)


(315,439)

Dividends paid

(58,865)


(58,400)

Sale / (Purchase) of treasury shares,net

13,798


(17,695)

Net cash used in financing activities

(424,979)


(481,158)

 

 



Net (decrease) / increase in cash and cash equivalents during the period

(606,295)


67,941

Cash and cash equivalents at 1 January

1,687,727


1,041,064


 



Cash and cash equivalents at 30 September *

1,081,432


1,109,005


 




 



Cash and cash equivalents comprise:

 



Cash and balances with banks (excluding CBB reserve balance and restricted cash)

295,838


369,548

Placements with financial institutions (original maturities of 3 months or less)

785,594


739,457


1,081,432


1,109,005

 

* net of expected credit loss of US$ 39 thousands (30 September 2023: US$ 18 thousands).

 

The accompanying notes 1 to 24 form an integral part of the condensed consolidated interim financial information.

 


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN OFF-BALANCE-SHEET ASSETS UNDER MANAGEMENT

for the nine months period ended 30 September 2024                                                                                                                                                                                                                                                                                                    US$ 000's

 

 30 September 2024 (Reviewed)

 

Opening Balance

Additions during the period

Distribution/ NAV Movement

Income

Expenses

Group fees

Closing Balance

Real Estate

 9,142,438

 484,199

 (368,133)

 258,507

 (232,409)

 (26,099)

 9,258,503

Private Equity

 709,755

 289,800

 (46,012)

 43,977

 (27,992)

 (15,986)

 953,542

As at 30 September 2024

 9,852,193

 773,999

 (414,145)

 302,484

 (260,401)

 (42,085)

 10,212,045

 

The above assets under management are also funded by financing arrangements at the level of operations amounting to US$ 3.7 billion (31 December 2023: US$ 3.55 billion).

 

The Group fees is in the form of management fee, performance fee and/ or Wakala fees at the level of investment vehicles or investors.  The above amounts include the groups co-investments in these products amounting to US$ 301,387 thousand (31 Dec 2023: US$ 254,610 thousand).

 

 

 30 September 2023 (Reviewed)

Opening Balance

Additions during the period

Distribution/ NAV Movement

Income

Expenses

Group fees

Closing Balance

Real Estate

 7,132,745

 1,282,297

 (228,620)

 153,656

 (141,525)

 (12,132)

 8,186,421

Private Equity

 584,187

 179,000

 10,124

 10,843

 (8,268)

 (2,574)

 773,312

As at 30 September 2023

 7,716,932

 1,461,297

 (218,496)

 164,499

 (149,793)

 (14,706)

 8,959,733

 

The above assets under management are also funded by financing arrangements at the level of operations amounting to US$ 3.58 billion (31 December 2022: US$ 3.27 billion).

 

The Group fees is in the form of management fee, performance fee and/ or Wakala fees at the level of investment vehicles or investors.  The above amounts include the groups co-investments in these products amounting to US$ 182,134 thousand (31 Dec 2022: US$ 142,051 thousand).

 

 

 

 

 

 

 

The accompanying notes 1 to 24 form an integral part of the condensed consolidated interim financial information.

 


 

1    Reporting entity

 

GFH Financial Group BSC ("the Bank") was incorporated in 1999 in the Kingdom of Bahrain under Commercial Registration No. 44136 and operates under an Islamic Wholesale Investment Banking license issued by the Central Bank of Bahrain ("CBB"). The Bank's shares are listed on the Bahrain, Kuwait, Dubai and Abu Dhabi Financial Market Stock Exchanges. The Bank's sukuk certificates are listed on London Stock Exchange. The Bank's activities are regulated by the CBB. The principal activities of the Bank include investment advisory services and investment transactions which comply with Islamic rules and principles determined by the Bank's Shari'a Supervisory Board.

 

The condensed consolidated interim financial information for the nine months ended 30 September 2024 comprise the financial information of GFH Financial Group BSC (GFH or the "Bank") and its subsidiaries (together referred to as "the Group"). 

 

The following are the principal subsidiaries consolidated in the condensed consolidated interim financial information.

 

Investee name

Country of incorporation

Effective ownership interests as at

30 September 2024

Activities

GFH Partners Limited

 

United Arab Emirates

100%

Investment management

GFH Capital S.A.

Saudi Arabia

100%

Investment management

Al Areen Hotels W.L.L.

Kingdom of Bahrain

 

100%

Hospitality management services

Khaleeji Bank BSC ('KHALEEJI')*

82.95%

Islamic retail bank

GFH Equities BSC (c)**

76.63%

Investment management

 

*During the previous quarter ended 30 June 2024, the Group's effective ownership was diluted to 57.95% as compared to effective ownership as on 31 December 2023 of 85.41% due to capital increase.

 

*During the current quarter, the Group has purchased the additional stake resulting increase in effective ownership to 82.95% as compared to 57.95% as on 30 June 2024.

 

** During quarter ended 30 June 2024, the Group acquired additional stake in GFH Equities BSC (c) which resulted in increase in effective ownership as on 30 June 2024 to 76.63% (31 December 2023: 62.91%).

 

The Bank has other investment holding companies, SPV's and subsidiaries, which are set up to supplement the activities of the Bank and its principal subsidiaries.

      

 

2          Basis of preparation

 

The condensed consolidated interim financial information of the Group has been prepared in accordance with Financial Accounting Standard FAS 41, Interim Financial Reporting ("FAS 41") issued by the Accounting and Auditing Organisation of Islamic Financial Institutions ("AAOIFI"). In line with the requirements of AAOIFI and the Central Bank of Bahrain (CBB) rule book, for matters not covered under AAOIFI standards the group uses guidance from the relevant IFRS Accounting Standards as issued by the International Accounting Standards Board ("IFRS Accounting Standards").

 

These condensed consolidated interim financial information are reviewed and not audited. The condensed consolidated interim financial information of the Group does not contain all information and disclosures required for the annual consolidated financial statements and should be read in conjunction with the Group's audited annual consolidated financial statements for the year ended 31 December 2023. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual consolidated financial statements as at and for the year ended 31 December 2023.

 

 

3          Significant accounting policies

 

The accounting policies and methods of computation applied by the Group in the preparation of the condensed consolidated interim financial information are the same as those used in the preparation of the Group's last audited consolidated financial statements as at and for the year ended 31 December 2023, except those arising from certain changes due to adoption of the following standards and amendments to standards effective from 1 January 2024. The impact of adoption of these standards and amendments is set out below.

 

a.   New standards, amendments and interpretations issued and effective for annual periods beginning on or after 1 January 2024:

 

1)   FAS 1 General Presentation and Disclosures in the Financial Statements

 

AAOIFI has issued the revised FAS 1 General Presentation and Disclosures in the Financial Statements in 2021. This standard describes and improves the overall presentation and disclosure requirements prescribed in line with the global best practices and supersedes the earlier FAS 1. It is applicable to all the Islamic Financial Institutions and other institutions following AAOIFI FAS's. This standard is effective for the financial reporting periods beginning on or after 1 January 2024 with an option to early adopt.

 

The revision of FAS 1 is in line with the modifications made to the AAOIFI conceptual framework for financial reporting. Significant changes relevant to the Group are a) Definition of Quasi-equity is introduced; b) Concept of comprehensive income has been introduced; and c) Disclosure of movement in Zakah and Charity have been relocated disclosed into the notes to the condensed consolidated financial information.

 

During the period, the Group has adopted FAS 1 revised. As a result of this adoption following changes were made to the primary statements of the Group. Below is a summary of the new primary statements:

 

Primary statements introduced

Statement of total comprehensive income

Statement of income and attribution related to quasi-equity

Statement of changes in off-balance-sheet assets under management

 

 

 

 

 

 

 

 

 

3    SIGNIFICANT ACCOUNTING POLICIES (continued)

 

New standards, amendments and interpretations issued and effective for annual periods beginning on or after 1 January 2024: (continued)

 

Primary statements discontinued

 

Statement of sources and uses of zakah and charity fund

 

As a result of the adoption of FAS 1 revised certain prior year figures have been represented and regrouped to be consistent with the current year presentation. Such grouping did not affect previously reported net profit, total assets, total liabilities and total equity of the Group. Further, the Group has elected to present statement of income and a statement of other comprehensive income as two separate statements.

 

b.   New standards, amendments, and interpretations issued but not yet effective

 

(i) FAS 45: Quasi-Equity (Including Investment Accounts)

AAOIFI has issued Financial Accounting Standard (FAS) 45 "Quasi-Equity (Including Investment Accounts)" during 2023. The objective of this standard is to establish the principles for identifying, measuring, and presenting "quasi-equity" instruments in the financial statements of Islamic Financial Institutions "IFIs".

 

The standard prescribes the principles of financial reporting to participatory investment instruments (including investment accounts) in which an IFI controls underlying assets (mostly, as working partner), on behalf of the stakeholders other than owner's equity. This standard provides the overall criteria for on-balance sheet accounting for participatory investment instruments and quasi-equity, as well as, pooling, recognition, derecognition, measurement, presentation and disclosure for quasi-equity.

 

This standard shall be effective for the financial reporting periods beginning on or after 1 January 2026 with an option to early adopt.

 

The Group does not expect any significant impact on the adoption of this standard.

 

(ii) FAS 46: Off-Balance-Sheet Assets Under Management

AAOIFI has issued Financial Accounting Standard ("FAS") 46 "Off-Balance-Sheet Assets Under Management" during 2023. The objective of this standard is to establish principles and rules for recognition, measurement, disclosure, and derecognition of off-balance-sheet assets under management, based on Shari'a and international best practices. The standard aims to improve transparency, comparability, accountability, and governance of financial reporting related to off-balance-sheet assets under management.

 

This standard is applicable to all IFIs with fiduciary responsibilities over asset(s) without control, except for the following:

• The participants' Takaful fund and / or participants' investment fund of a Takaful institution; and

• An investment fund managed by an institution, being a separate legal entity, which is subject to financial reporting in line with the requirements of the respective AAOIFI FAS.

 

This standard shall be effective for the financial reporting periods beginning on or after 1 January 2026 with an option to early adopt.

 

This standard shall be effective for the financial periods beginning on or after 1 January 2026 with an option to early adopt. This standard shall be adopted at the same time as adoption of FAS 45 "Quasi-Equity (Including Investment Accounts)".

 

The Group does not expect any significant impact on the adoption of this standard.

 

 

 

 

3    SIGNIFICANT ACCOUNTING POLICIES (continued)

 

(iii) FAS 47: Transfer of Assets Between Investment Pools

AAOIFI has issued Financial Accounting Standard ("FAS") 47 "Transfer of Assets Between Investment Pools" during 2023.  The objective of this standard is to establish guidance on the accounting treatment and disclosures for transfers of assets between investment pools that are managed by the same institution or its related parties. The standard applies to transfers of assets that are not part of a business combination, a disposal of a business, or a restructuring of an institution.

 

The standard defines an investment pool as a group of assets that are managed together to achieve a common investment objective, such as a fund, a portfolio, or a trust. The standard also defines a transfer of assets as a transaction or event that results in a change in the legal ownership or economic substance of the assets, such as a sale, a contribution, a distribution, or a reclassification.

 

The transfer of assets between investment pools should be accounted for based on the substance of the transaction and the terms and conditions of the transfer agreement. The standard classifies transfers of assets into three categories: transfers at fair value, transfers at carrying amount, and transfers at other than fair value or carrying amount. The standard also specifies the disclosure requirements for transfers of assets between investment pools.

 

This standard shall be effective for the financial periods beginning on or after 1 January 2026 with an option to early adopt.

 

The Group does not expect any significant impact on the adoption of this standard.

 

 

4          Estimates and judgements

 

Preparation of condensed consolidated interim financial information requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. The areas of significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were similar to those applied to the audited consolidated financial statements as at and for the year ended 31 December 2023.

 

 

5          Financial risk management

 

The Group's financial risk management objectives and policies are consistent with those disclosed in the audited consolidated financial statements for the year ended 31 December 2023.

 

Regulatory ratios

a.   Net stable funding Ratio (NSFR)

NSFR as a percentage is calculated as "Available stable funding" divided by "Required stable funding".

 



 

 

5         Financial risk management (continued)

 

The Consolidated NSFR calculated as per the requirements of the CBB rulebook, is as follows:                     

 

As at 30 September 2024

 

No.

Item

No Specified Maturity

Less than 6 months

More than 6 months and less than one year

Over one year

Total weighted value

Available Stable Funding (ASF):

1

Capital:






2

Regulatory Capital

                  976,124

                       -  

                              -  

               48,246

              1,024,370

3

Other Capital Instruments

                                -  

                       -  

                              -  

                          -  

                                -  

4

Retail deposits and deposits from small business customers:






5

Stable deposits


         161,079

                   42,027

                 2,502

                  195,452

6

Less stable deposits

                                -  

     2,457,310

                597,073

            178,413

              2,927,358

7

Wholesale funding:






8

Operational deposits






9

Other Wholesale funding

                                -  

     4,348,260

                768,828

            936,588

              5,234,436

10

Other liabilities:






11

NSFR Shari'a-compliant hedging contract liabilities


                       -  

                              -  

                          -  


12

All other liabilities not included in the above categories

                                -  

         477,763

                              -  

               26,536

                     26,536

13

Total ASF





              9,408,152

Required Stable Funding (RSF):

14

Total NSFR high-quality liquid assets (HQLA)

        1,998,884.99

                       -  

                              -  

                          -  

                     98,221

15

Depsoits held at other financial institutions for opetational purposes






16

Performing financing and sukuk/ securities:

                                -  

     1,329,396

                              -  

        1,239,317

              1,252,828

17

Performing financial to financial institutions by level 1 HQLA

                                -  

                       -  

                              -  

                          -  

                                -  

18

Performing financing to financial institutions secured by non-level 1 HQLA and unsecured performing financing to financial institutions

                                -  

         145,590

                              -  

        1,194,906

              1,088,465

19

Performing financing to non- financial corporate clients, financing to retail and small business customers, and financing to sovereigns, central banks and PSEs, of which:

                                -  

         113,115

                252,442

            373,054

                  425,263

20

With a risk weight of less than or equal to 35% as per the CBB Capital Adequacy Ratio guidelines

                                -  

                       -  

                              -  

                          -  

                                -  

21

Performing residential mortgages, of which:

                                -  

                       -  

                              -  

                          -  

                                -  

22

With a risk weight of less than or equal to 35% under the CBB Capital Adequacy Ratio Guidelines

                                -  

                       -  

                              -  

                          -  

                                -  

23

Securities/sukuk that are not in default and do not qualify as HQLA, including exchange-traded equities

                                -  

         905,742

                142,866

            418,776

                  943,080

24

Other assets:






25

Physical traded commodities, including gold

                                -  




                                -  

26

Assets posted as initial margin for Shari'a-compliant hedging contracts contracts and
contributions to default funds of CCPs


                       -  

                              -  

                          -  

                                -   

27

NSFR Shari'a-compliant hedging assets


                       -  

                              -  

                          -  

                       2,013

28

NSFR Shari'a-compliant hedging contract liabilities before deduction of variation
margin posted


                       -  

                              -  

                          -  

                                -  

29

All other assets not included in the above categories

              2,946,497

                       -  

                              -  

                          -  

              2,946,497

30

OBS items


                       -  

                              -  

                          -  

                     74,136

31

Total RSF


     2,493,842

                395,307

        3,226,053

              6,830,505

32

NSFR(%)





138%

 

 

 

 

 



 

 

5         Financial risk management (continued)

 

As at 31 December 2023

 

No.

Item

No Specified Maturity

Less than 6 months

More than 6 months and less than one year

Over one year

Total weighted value

Available Stable Funding (ASF):

1

Capital:






2

Regulatory Capital

1,023,275

-

-

64,133

1,087,409

3

Other Capital Instruments

-

-

-

-

-

4

Retail deposits and deposits from small business customers:






5

Stable deposits

-

159,304

36,446

3,763

189,725

6

Less stable deposits

-

1,964,119

518,381

503,663

2,737,913

7

Wholesale funding:






8

Operational deposits

-

-

-

-

-

9

Other Wholesale funding

-

4,157,571

544,672

1,438,472

5,452,622

10

Other liabilities:






11

NSFR Shari'a-compliant hedging contract liabilities


-

-

-


12

All other liabilities not included in the above categories

-

481,509

-

36,139

36,139

13

Total ASF





9,503,808

 

Required Stable Funding (RSF):

14

Total NSFR high-quality liquid assets (HQLA)

1,761,766




97,918

15

Depsoits held at other financial institutions for opetational purposes






16

Performing financing and sukuk/ securities:


1,841,985


791,830

949,354

17

Performing financial to financial institutions by level 1 HQLA

-

-

-

-

-

18

Performing financing to financial institutions secured by non-level 1 HQLA and unsecured performing financing to financial institutions

-

19,610

934

1,041,445

895,500

19

Performing financing to non- financial corporate clients, financing to retail and small business customers, and financing to sovereigns, central banks and PSEs, of which:

-

254,059

76,796

364,685

402,473

20

With a risk weight of less than or equal to 35% as per the CBB Capital Adequacy Ratio guidelines

-

-

-

-

-

21

Performing residential mortgages, of which:

-

-

-

-

-

22

With a risk weight of less than or equal to 35% under the CBB Capital Adequacy Ratio Guidelines

-

-

-

-

-

 

 

 

 

 

 

 

 



 

 

5      FINANCIAL RISK MANAGEMENT (continued)

 

No.

Item

No Specified Maturity

Less than 6 months

More than 6 months and less than one year

Over one year

Total weighted value

23

Securities/sukuk that are not in default and do not qualify as HQLA, including exchange-traded equities

-

1,048,701

25,995

578,308

1,115,656

24

Other assets:

-

-

-

-

-

25

Physical traded commodities, including gold

-




-

26

Assets posted as initial margin for Shari'a-compliant hedging contracts contracts and
contributions to default funds of CCPs


-

-

-

-

27

NSFR Shari'a-compliant hedging assets


-

-

-

2,195

28

NSFR Shari'a-compliant hedging contract liabilities before deduction of variation
margin posted


-

-

-

-

29

All other assets not included in the above categories

2,908,175

-

-

-

2,908,175

30

OBS items


-

-

-

62,381

31

Total RSF


3,164,354

103,726

2,776,269

6,433,652

32

NSFR(%)





148%

 

 

b.      Liquidity Coverage Ratio (LCR)

 

LCR is computed as a ratio of Stock of High-Quality Liquid Assets (HQLA) over the Net cash outflows over the next 30 calendar days.

 


Average balance


30 September 2024

(reviewed)

31 December 2023

(audited)


 


Stock of HQLA

555,734

444,865

Net cashflows

210,207

196,313

LCR %

261%

233%

Minimum required by CBB

100%

100%



 

 

5          FINANCIAL RISK MANAGEMENT (continued)

 

c.   Capital Adequacy Ratio

 


30 September

2024

(reviewed)

31 December 2023

(audited)




CET 1 Capital before regulatory adjustments

          993,297

1,023,275

Less: regulatory adjustments

-

-




CET 1 Capital after regulatory adjustments

          993,297

1,023,275

AT1 Capital

3,434

-

T 2 Capital adjustments

48,246

64,133

Regulatory Capital

1,044,977

1,087,408




Risk weighted exposure:



Credit Risk Weighted Assets

        5,338,249

4,585,950

Market Risk Weighted Assets

118,762

90,135

Operational Risk Weighted Assets

          511,093

506,408

Total Regulatory Risk Weighted Assets

5,968,104

5,182,493




Investment risk reserve (30% only)

2

2

Profit equalization reserve (30% only)

3

3

Total Adjusted Risk Weighted Exposures

           5,968,099

5,182,488

 



Capital Adequacy Ratio (CAR)

17.51%

20.98%

Tier 1 Capital Adequacy Ratio

16.70%

19.74%

 



Minimum CAR required by CBB

12.50%

12.50%

 

 

6          Seasonality

 

Due to the inherent nature of the Group's business (investment banking, commercial banking and treasury  and proprietary), the nine-months results reported in this condensed consolidated interim financial information may not represent a proportionate share of the overall annual results.   

 

 

7          Comparatives

 

Comparative figures have been regrouped to conform with the presentation for current period. Such regrouping did not affect previously reported profit for the period or total equity. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8    Treasury portfolio

 

 

30 September

2024

 

31 December 2023

 

30 September

2023

 

(reviewed)

 

(audited)

 

(reviewed)

 

 

 

 

 

 

Placements with financial institutions

892,566


1,458,368


1,233,133

 






Derivatives






At fair value through statement of income

2,031


2,195


4,412

 






Equity type investments






At fair value through OCI






-     Quoted sukuk

31,460


33,326


32,471

 






At fair value through statement of income






-     Structured notes*

370,306


404,839


429,273

-     Quoted fund

30,145


27,099


27,742

 






Debt type investments






At fair value through OCI






-     Quoted sukuk*

736,908


784,300   


818,146

 






At amortised cost






-     Quoted sukuk*

2,490,723


2,447,489


2,450,455

-     Unquoted sukuk

4,546


3,494


3,494

 






Less: Impairment allowances

(26,062)


(26,078)


(28,984)

 






 

4,532,623


5,135,032


4,970,142  

 

*Short-term and medium-term facilities of US$ 1,710,365 thousand (31 December 2023: US$ 1,857,388 thousand) are secured by quoted sukuk of US$ 2,715,738 thousand (31 December 2023: US$ 2,762,506 thousand) and structured notes of US$ 370,306 thousand (31 December 2023: US$ 404,839 thousand).

 

 

9          Financing CONTRACTS


30 September

2024

 

31 December 2023


30 September

2023

 

(reviewed)


(audited)


(reviewed)







Murabaha*

1,424,697


1,029,324


1,052,176

Mudharaba

21,138


20,564


20,877

Ijarah assets

658,026


559,200


553,093


2,103,861


1,609,088


1,626,146

Less: Impairment allowances

(68,735)


(64,278)


(67,344)








2,035,126


1,544,810


1,558,802

*Murabaha financing receivables are net of deferred profits of US$ 38,103 thousands                                                           (31 December 2023: US$ 41,727 thousands).



 

 

9    Financing Contracts (continued)

 

The movement on financing contracts and impairment allowances is as follows:

 

Financing contracts

Stage 1

Stage 2

Stage 3

Total

 

 

 

 

 

Financing contracts (gross)

 1,747,116

 195,668

 161,077

 2,103,861

Expected credit loss

 (6,139)

 (11,507)

 (51,089)

 (68,735)

 

Financing contracts (net)

1,740,977

184,161

109,988

2,035,126

 

Impairment allowances

Stage 1

Stage 2

Stage 3

Total

 

 

 

 

 

At 1 January 2024

 4,788

 18,310

 41,180

 64,278

Net movement between stages

 8,192

 (12,053)

 3,861

 -  

Net charge for the period

  (6,841)

 5,250

 7,391

 5,800

Write-offs

-

-

 (1,343)

 (1,343)

 

At 30 September 2024 (reviewed)

6,139

11,507

51,089

68,735

 

31 December 2023

Stage 1

Stage 2

Stage 3

Total

 





Financing contracts (gross)

  1,192,539  

 284,047

 132,502

  1,609,088  

Expected credit loss

 (4,788)

 (18,310)

 (41,180)

 (64,278)

 

Financing contracts (net)

  1,187,751  

 265,737

 91,322

  1,544,810  

 

Impairment allowances

Stage 1

Stage 2

Stage 3

Total

 





Balance at 1 January 2023

18,046

11,990

34,336

64,372

Net transfers

(6,879)

(1,920)

8,799

-

Net charge for the year

(6,379)

8,240

644

2,505

Write-off

-

-

(2,599)

(2,599)

 

At 31 December 2023 (audited)

4,788

18,310

41,180

64,278

 

30 September 2023

Stage 1

Stage 2

Stage 3

Total

 





Financing assets (gross)

1,171,407

316,177

138,562

1,626,146

Expected credit loss

(4,846)

(21,579)

(40,919)

(67,344)

 

Financing assets (net)

1,166,561

294,598

97,643

1,558,802

 

Impairment allowances

Stage 1

Stage 2

Stage 3

Total






At 1 January 2023

18,046

11,990

34,336

64,372

Net movement between stages

(4,515)

1,032

3,483

-

Net charge for the period

(8,685)

8,557

3,339

3,211

Write-offs

-

-

(239)

(239)

 

At 30 September 2023 (reviewed)

4,846

21,579

40,919

67,344

 



 

 

10    Investment in real estate


30 September

2024

 

31 December 2023


30 September

2023

 

(reviewed)


(audited)


(reviewed)

Investment Property






-     Land

 400,984


483,685


581,836

-     Building

 123,847


141,471


196,252


524,831


625,156


778,088

Development Property






-     Land

169,128


165,565


154,183

-     Building

505,921


581,211


401,102


675,049


746,776


555,285




 




1,199,880


1,371,932


1,333,373

 

11    Co-investments


30 September

2024

 

31 December 2023


30 September

2023

 

(reviewed)


(audited)


(reviewed)

At fair value through OCI






-     Unquoted securities

293,600


247,048


173,195







At fair value through statement of income






-     Unquoted securities

9,393


9,168


8,939

 

Impairment allowance

(1,606)


(1,606)


-

 

 

 





301,387


254,610


182,134

 

 

12       Proprietary investments


30 September

2024

 

31 December 2023


30 September

2023

 

(reviewed)


(audited)


(reviewed)

Equity type investments






At fair value through statement of income






-     Unquoted securities

17,449


2,942


2,942

-     Listed securities

27,214


14,252


11,442


44,663


17,194


14,384

At fair value through OCI






-     Listed securities (at fair value)

18,077


-


-

-     Equity type Sukuk

886,781


827,012


828,759

-     Unquoted securities 

63,271


64,045


58,413

 

968,129

 

891,057


887,172

 

 

 




Equity-accounted investees

155,764

 

137,390


116,489

 

Impairment allowance

 

(2,513)

 

(914)


(12)


1,166,043


1,044,727


1,018,033

 



 

 

13    RECEIVABLES AND OTHER ASSETS

 

               


30 September

2024

 

31 December 2023


30 September 2023


(reviewed)

 

(audited)


(reviewed)



 




Investment banking receivables*

211,149


307,597


273,860

Receivable from equity-accounted investees

164,789


93,318


90,123

Financing to projects, net

5,827


7,281


5,827

Receivable on sale of real estate

147,263


16,376


14,057

Advances and deposits

72,287


62,416


66,417

Employee receivables

20,857


7,443


7,579

Profit on sukuk receivable

21,865


19,948


23,817

Lease rentals receivable

3,282


4,025


4,788

Goodwill and intangibles

73,459


45,187


61,694

Receivable from sale of investments

78,127


71,281


29,147

Prepayments and other receivables

262,683


198,407


247,897

Less: Impairment allowance

(23,281)


(7,948)


(7,709)



 




 

 

1,038,307

 

  825,331


817,497

 

 

* Subsequent to the period, the amounts due were significantly settled from subscriptions collected in  

client money accounts.

 

 

14   Term financing


30 September

2024

 

31 December 2023

 

30 September

2023


(reviewed)


(audited)


(reviewed)







Murabaha financing* (note 8)

1,719,360


1,880,910


1,593,075

Sukuk **

236,903


241,777


237,253

Ijarah financing

-


-


15,632

Other borrowings

1,798


1,620


1,568

 

 

 


 


 

1,958,061


2,124,307


1,847,528

*Murabaha financing comprise:

 

Short-term and medium-term facilities of US$ 1,710,365 thousand (31 December 2023: US$ 1,857,388 thousand) are secured by quoted sukuk of US$ 2,715,738 thousand (31 December 2023: US$ 2,762,506 thousand) and structured notes of US$ 370,306 thousand (31 December 2023: US$ 404,839 thousand).

 

** Sukuk

Represents outstanding unsecured sukuk certificates with a profit rate of 7.5% p.a. repayable by 2025. The outstanding sukuk also includes accrued profit of US$ 3,604 thousand.

 

 



 

 

15   OTHER LIABILITIES


 

 





30 September

2024

 

31 December 2023


30 September

2023

 

(reviewed)


(audited)


 (reviewed)

 






Investment banking payables*

118,622


173,297


319,720

Accounts Payables

78,748


46,091


58,967

Unclaimed dividends

3,630


2,312


2,615

Payables to equity-accounted investees

22,435


107,466


68,388

Other accrued expenses and payables

57,395


67,292


55,665

Deferred Income

9,897


32,240


19,431

Payables towards purchase of investments

50,239


63,068


25,000

Zakah and Charity Fund

10,435


6,331


6,715

Advance received from customers**

2,049


2,106


7,756

Employee related accruals

20,003


25,039


14,038

Mudaraba profit accrual

13,929


22,814


17,794

Payable related to acquisition of additional stake in subsidiary

 

101,220


-


-

Payable related to buy-back of treasury shares

 

37,869


-


-



 




 

526,471

 

548,056


596,089

 

*Represents amounts payable against assets acquired as part of investment banking deals along with payable for ongoing project related costs of the said SPVs. These payables on receipt of funds from investment banking receivables and underlying SPV's are usually settled within 12 months.

 

**Represents amount received in advance from the customers on account of real estate assets to be delivered by the Group.

 

 

16   QUASI EQUITY

 

30 September

2024

 

31 December 2023


30 September 2023

(reviewed)


(audited)


(reviewed)

1,806,102


2,312,153


1,800,918

1,317,287


1,138,853


1,299,619

3,123,389

 

3,451,006


3,100,537

 

 

 

 

Financial institutions

Non-financial institutions and individuals

 

 

 

 

30 September

2024

 

31 December 2023


30 September 2023

(reviewed)


(audited)


(reviewed)

146,234


50,266


78,135

82,703


75,310


75,310

1,830,578


2,202,334  


1,810,705

987,708


1,006,144


1,018,101

31,979


71,334


71,334

44,187


45,618


46,952

 

 



3,123,389

 

3,451,006


3,100,537

 

 

 

 

Balances with banks

CBB reserve account

Treasury portfolio

Financing contracts

Proprietary Investments

Investment in real estate

           

 

 

 

 

 

 

17   Impairment allowances, net

 

 

Nine months ended


Three months ended

 

30 September 2024 (reviewed)

30 September 2023

(reviewed)


30 September

2024

(reviewed)

30 September 2023 (reviewed)

Expected credit loss on:






Bank balances

(24)

8


15

(12)

Treasury portfolio (note 8)

(16)

12,021


1,327

9,909

Financing assets, net (note 9)

5,800

3,211


1,934

(3,546)

Commitments and financial guarantees

-

(6)


-

(6)

 

5,760

15,234


3,276

6,345

Impairment on proprietary investment (note 12)

1,599

(28)

 

547

3

Impairment on other receivables (note 13)

15,333

(1,599)


264

307

 

 

22,692

13,607


4,087

6,655

 

 

18   EARNINGS PER SHARE

 

The calculation of basic earnings per share has been based on the following profit attributable to the ordinary shareholders and weighted-average number of ordinary shares outstanding. The Group does not have any diluted potentially ordinary shares as of the reporting dates. Hence, the basic and diluted earnings per share is similar.

 

 

Nine months ended


Three months ended

 

30 September 2024

(reviewed)

30 September

2023

(reviewed)


30 September 2024

(reviewed)

30 September

2023

(reviewed)

Profit attributable to shareholders of the Bank

 

87,947

78,921


 

27,200

24,305

Weighted Average number of shares outstanding during the period

 

3,613,569

3,499,368


 

3,722,969

3,431,369

Earnings per share






Basic and diluted earnings per share (US cents)

2.43

2.26


0.73

0.71

 

 

 

 

 

 

 

 

 

 

 

 

               

 

19   Related party transactions

 

The significant related party balances and transactions as at 30 September 2024 are given below:

 

 

Related parties as per FAS 1

Assets under management (including special purpose and other entities)

Total

30 September 2024 (reviewed)

Equity-accounted investees

Key management personnel

Significant shareholders / entities in which directors are interested

Assets






Treasury portfolio

-

-

-

60,482

60,482

Financing contracts

-

10,528

230,167

17,932

258,627

Proprietary investments

886,781

-

6,058

9,865

902,704

Co-investments

-

-

-

301,387

301,387

Receivables and other assets

164,789

6,996

25,175

211,149

408,109






 

Liabilities





 

Placements from financial, non-financial institutions and individuals

-

4,501

3,931

-

8,432

Current accounts

6,480

501

39,358

19,099

65,438

Other liabilities

22,435

7,420

-

118,622

148,477






 

Quasi equity

 6,249

 8,568

 100,954

 19,040

 134,811

 





 

Income





 

Investment banking

 -

 -  

 -  

133,190

  133,190  

Commercial banking





 

-   Income from financing

                                 -  

                               451

                             1,732

                                 -  

                           2,183

Treasury and proprietary investments

   35,215   

 -  

 -  

  69,777

104,992

Expenses





 

Operating expenses

 -  

 (493)

 -  

 (284)

 (777)

Staff Cost

 -  

 (11,602)

 -  

 -  

 (11,602)

Finance Cost

 (37)

 (379)

  (11,171)

 (13)

(11,600)

 



 

 

19   Related party transactions (continued)

 


Related parties as per FAS 1

Assets under management (including special purpose and other entities)

Total

31 December 2023 (audited)

Equity-accounted investees

Key management personnel

Significant shareholders / entities in which directors are interested

Assets






Treasury portfolio

-

-

-

70,546

70,546

Financing contracts

-

11,202

85,055

19,489

115,746

Proprietary investments

827,161

-

7,686

13,667

848,514

Co-investments

-

-

-

254,610

254,610

Receivables and prepayments

93,318

6,731

1,507

307,597

409,153







Liabilities






Placements from financial, non-financial institutions and individuals

-

5,602

8,622

-

14,224

Current accounts

2,971

16

29,233

19,122

51,342

Payables and accruals

107,466

7,196

-

173,297

287,959







Quasi equity

2,485

5,027

44,145

14,422

66,079







30 September 2023 (reviewed)






Income






Investment banking

-

-

-

150,023

150,023

Commercial banking






-   Income from financing

-

477

4,759

-

5,236

-   Less: Return to quasi equity

(37)

(172)

(8,520)

(13)

(8,742)

-   Less: Finance expense

-

(194)

(8,565)

-

(8,759)

Treasury and proprietary investments

28,351

-

9,347

2,065

39,763







Expenses






Operating expenses

-

(878)

-

-

(878)

Staff Cost

-

(6,750)

-

-

(6,750)

Finance Cost

-

-

-

(2,345)

(2,345)

 

 

 

 

 

 

 

 

 

 


NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

for the nine months ended 30 September 2024                                                                                                                                                                                                                                                                                                 US$ 000's

 

20   Segment reporting

                                                                                                                                                                        

The Group is organised into business units based on their nature of operations and independent reporting entities and has three reportable operating segments namely investment banking, commercial banking and treasury and proprietary.

 

 

Investment banking

Commercial banking

Proprietary and treasury

Total

30 September 2024 (reviewed)





Segment revenue

 133,190

 95,875

 257,421

 486,486

Segment expenses

 (75,880)

 (72,096)

 (220,262)

 (368,238)

Impairment allowance

 -  

 (5,120)

 (17,572)

 (22,692)

Segment result

 57,310

 18,659

 19,587

 95,556

Segment assets

 191,411

 4,121,457

 6,626,587

 10,939,455

Segment liabilities

 165,180

 2,433,261

 4,116,033

 6,714,474

Quasi equity

 -  

 1,354,314

 1,769,075

 3,123,389

Other segment information




 

Proprietary investments (Equity-accounted investees)

 -  

 17,220

 138,544

 155,764

Commitments

 13,162

 94,607

 27,559

 135,328

                       


NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

for the nine months ended 30 September 2024                                                                                                                                                                                                                                                                                   `                US$ 000's

 

20   Segment reporting (continued)

 

 

Investment banking

Commercial banking

Proprietary and treasury

Total

30 September 2023 (reviewed)





Segment revenue

 166,270

 54,561

 119,568

 340,399

Segment expenses

 (116,838)

 (25,997)

 (102,908)

 (245,743)

Impairment allowance

 -  

 (3,080)

 (10,527)

 (13,607)

Segment result

 49,432

 25,484

 6,133

 81,049

31 December 2023 (audited)





Segment assets

278,056

3,985,192

6,858,231

11,121,479

Segment liabilities

208,859

2,146,851

4,240,401

6,596,111

Quasi equity

-

1,420,854

2,030,152

3,451,006

Other segment information





Proprietary investments (Equity-accounted investees)

-

8,656

128,734

137,390

Commitments

49,147

154,550

-

203,697

 

 

           


 

21   Commitments and contingencies

 

The commitments contracted in the normal course of business of the Group:

 


30 September

2024

(reviewed)


31 December 2023

(audited) 


30 September

2023

 (reviewed)



 




Undrawn commitments to extend finance

 76,454

 

113,873


122,069

Financial guarantees

 18,154

 

40,677


41,552

Capital commitment for infrastructure development projects

 

40,720

 

49,147


49,147



 





135,328  

 

203,697


212,768

 

Performance obligations

During the ordinary course of business, the Group may performance obligations in respect of its infrastructure development projects. It is usual practice of the Group to pass these performance obligations, wherever possible, on to the companies that own the projects. In the opinion of the management, no liabilities are expected to materialise on the Group at 30 September 2024 due to the performance of any of its projects.

 

Litigations, claims and contingencies

The Group has several claims and litigations filed against it in connection with projects promoted by the Bank in the past and with certain transactions. Further, claims against the Group entities also have been filed by former employees and customers. Based on the advice of the Bank's external legal counsel, the management is of the opinion that the Bank has strong grounds to successfully defend itself against these claims. Where applicable, appropriate provision has been made in the books of accounts. No further disclosures regarding contingent liabilities arising from any such claims are being made by the Bank as the directors of the Bank believe that such disclosures may be prejudicial to the Bank's legal position.

 

 

22   Financial instruments

 

Fair values

Fair value is an amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties at a price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

 

Underlying the definition of fair value is a presumption that an enterprise is a going concern without any intention or need to liquidate, curtail materially the scale of its operations or undertake a transaction on adverse terms.

 



 

 

22   Financial instruments (continued)

 

Fair value hierarchy

The different levels have been defined as follows:

 

·    Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities.

·    Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e.as prices) or indirectly (i.e., derived from prices).

·    Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

 

The following table shows the valuation techniques used in measuring fair values, as well as the significant unobservable inputs used:

 

Type

Valuation technique

Significant unobservable inputs

Inter-relationship between significant unobservable inputs and fair value measurement

Structured notes

Fair value of underlying reference portfolio adjusted for embedded derivatives that protect downside risk and cap upside potential over the period of the contract.

Credit risk of counterparty and volatility assumptions for time to maturity

Ability of the Group to hold the structure note to maturity and impact of the value of embedded derivatives (strike prices and barriers for coupon and principal).

 

Equity investments

 

Discounted cash flow

Marketability factor and Discount rate

Ability of Group to exit these investments and their impact on the overall value as these are unquoted investments.

 

The potential effect of change in assumptions used above would have the following effects.

 


30 September 2024 (reviewed)


30 September 2023 (reviewed)


Statement of Income

FVOCI


Statement of Income

FVOCI

Equity instruments- marketability factor (±10%)

±939

±37,495


 

±894

 

± 23,161

Structured notes- impact in underlying value (±5%)

±18,515

-


 

±21,464

 

-

Proprietary Investments- impact of change in value (±5%)

±2,233

-


 

±719

 

-

Quoted Fund- impact in underlying value (±5%)

±1,507

-


 

±1,387

 

-

 



 

 

22   Financial instruments (continued)

 

The table below analyses the financial instruments carried at fair value, by valuation method.

 

30 September 2024 (reviewed)

Level 1

Level 2

Level 3

Total

i) Proprietary investments





Investment securities carried at fair value through:





-     statement of income

 44,663

 -  

 -  

 44,663

-     OCI

 18,077

 886,781

 63,271

 968,129


 62,740

 886,781

 63,271

 1,012,792

ii)  Treasury portfolio





Investment securities carried at fair value through:





-     statement of income

 -  

 402,482

 -  

 402,482

-     OCI

 768,368

 -  

 -  

 768,368


 768,368

 402,482

 -  

 1,170,850

iii) Co-investments




 

Investment securities carried at fair value through





-     OCI

 -  

 -  

 293,600

 293,600

-     statement of income

 -  

 -  

 9,393

 9,393


 -  

 -  

 302,993

 302,993







 831,108

 1,289,263

 366,264

  2,486,635

 

31 December 2023 (audited)

Level 1

Level 2

Level 3

Total


 

 

 

 

(i)        Proprietary investments





Investment securities carried at fair value through:





-     statement of income

17,194

-

-

17,194

-     OCI

-

827,012

64,045

891,057


17,194

827,012

64,045

908,251

(ii) Treasury portfolio





Investment securities carried at fair value through:





-     statement of income

-

434,133

-

434,133

-     OCI

817,626

-

-

817,626


817,626

434,133

-

1,251,759

iii)  Co-investments





Investment securities carried at fair value through OCI

-

-

247,048

 247,048

Investment securities carried at fair value through statement of income

-

-

9,168

9,168


-

-

256,216

256,216


 834,820

1,261,145

 320,261

 2,416,226



 

 

22   Financial instruments (continued)

 

The following table analyses the movement in Level 3 financial assets during the period:

 


30 September

2024


31 December 2023


 (reviewed)


 (audited)



 


320,261


197,944            

Disposals

(23,406)

 

(3,682)

Purchases / reclassification

69,183


127,134

Fair value changes during the period

226


(1,135)

At end of the period

           

           366,264            


320,261

 

 

23   ACQUISITION OF SUBSIDIARIES

 

During the period, the Group acquired controlling stake in the below subsidiary.

 


% Stake acquired

Place of incorporation

Nature of activities

TEI Holdings

50.1%

Cayman Islands

Investment in market leading mobile commerce-based discount offering business in UAE

 

 

Identifiable assets acquired and liabilities assumed

 

Entity acquired was considered as a business. The fair value of assets, liabilities, equity interests have been reported on a provisional basis. If new information, obtained within one year from the acquisition date about facts and circumstances that existed at the acquisition date, identifies adjustments to the above amounts, or any additional provisions that existed at the acquisition date, then the acquisition accounting will be revised. Revisions to provisional acquisition accounting are required to be done on a retrospective basis.

 

 

 

 



 

 

23   ACQUISITION OF SUBSIDIARIES (continued)

 

The reported amounts below represent the adjusted acquisition carrying values of the acquired entities at the date of acquisition reported on a provisional basis as permitted by accounting standards.

 



2024




Intangible assets


2,703

Tangible assets


1,907

Receivables


33,262

Cash and bank balances


5,584




Total assets


43,456




Accruals and other liabilities


22,935




Total liabilities


22,935



 

Total net identifiable assets and liabilities (A)


20,521

 



2024




Consideration 


   35,534

Non-controlling interests recognised


12,287




Total consideration (B)


47,821

 

Goodwill (B-A)


27,300

 

 

 

24.  SUBSEQUENT EVENTS

Subsequent to period end, the Group has successfully raised debt funding of $500,000 thousand at profit rate of 7.5% for a period of 5 years through Trust Certificate Issuance Program (Sukuk).

 

 

 

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