Bahrain’s Gulf Finance House (GFH) posted on Sunday a $607 million fourth quarter loss as the bank cleaned the legacy of a regional real estate crash from its books as expected.
The Islamic investment house posted a full year net loss of $728 million, compared to a $292 million net profit during the previous year. It had posted an $11 million loss during the fourth quarter of 2008.
Analysts had expected GFH to post a steep quarterly loss as it wrote down asset valuations in its books.
Analysts at SICO Investment Bank had expected impairment charges during the quarter of $475 to $600 million, including the $300 million write off of a Dubai property project already announced by GFH in December.
Analysts and bankers have said that GFH, one of the Bahraini investment houses badly hit by the 2008 end to a regional property boom, needed to sell assets to avoid further funding difficulties.
It escaped default on a $300 million loan maturing last week, by reaching an eleventh hour deal with lenders to roll over one third of the loan by six months.
It is also negotiating a $50 million debt tranche coming due on March 3.
Bahrain’s offshore investment houses mostly relied on earning fees from raising investor money for real estate and private equity projects, a market which has collapsed during the financial crisis.
