GFH FINANCIAL GROUP BSC
CONDENSED CONSOLIDATED INTERIM
FINANCIAL INFORMATION
30 June 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 six months ended 30 June 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 June 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 June 2024; · the condensed consolidated statement of income for the three month and six-month periods ended 30 June 2024; · the condensed consolidated statement of total comprehensive income for the three-month and six-month periods ended · the condensed consolidated statement of income and attribution related to quasi-equity for the three-month and six-month periods ended 30 June 2024; · the condensed consolidated statement of changes in owners' equity for the six-month period ended · the condensed consolidated statement of cash flows for the six-month period ended 30 June 2024; · the condensed consolidated statement of changes in off-balance-sheet assets under management for the six-month period ended 30 June 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 June 2024 condensed consolidated interim financial information is not prepared, in all material respects, in accordance with FAS 41, "Interim Financial Reporting".
12 August 2024 |
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2024 US$ 000's
|
Note |
30 June 2024 |
|
31 December 2023 |
|
30 June 2023 |
|
|
(reviewed) |
|
(audited) |
|
(reviewed) |
ASSETS |
|
|
|
|
|
|
Cash and bank balances |
|
290,253 |
|
376,884 |
|
398,578 |
Treasury portfolio |
8 |
4,768,073 |
|
5,135,032 |
|
4,944,127 |
Financing contracts |
9 |
1,795,753 |
|
1,544,810 |
|
1,535,395 |
Real estate investment |
10 |
1,244,496 |
|
1,371,932 |
|
1,320,989 |
Co-investments |
11 |
278,371 |
|
254,610 |
|
169,471 |
Proprietary investments |
12 |
1,183,067 |
|
1,044,727 |
|
1,033,743 |
Receivables and other assets |
13 |
1,046,358 |
|
825,331 |
|
726,535 |
Property and equipment |
|
282,243 |
|
229,534 |
|
207,223 |
Assets held for sale |
|
- |
|
338,619 |
|
- |
TOTAL ASSETS |
|
10,888,614 |
|
11,121,479 |
|
10,336,061 |
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
Clients' funds |
|
148,596 |
|
206,222 |
|
151,190 |
Placements from financial institutions |
|
1,939,146 |
|
2,323,217 |
|
2,959,023 |
Placements from non-financial institutions and individuals |
|
1,183,290 |
|
960,050 |
|
1,182,960 |
Customer current accounts |
|
474,507 |
|
203,697 |
|
225,831 |
Term financing |
14 |
1,981,348 |
|
2,124,307 |
|
1,975,706 |
Other liabilities |
15 |
404,165 |
|
548,056 |
|
630,094 |
Liabilities directly associated with assets held for sale |
|
- |
|
230,562 |
|
- |
TOTAL LIABILITIES |
|
6,131,052 |
|
6,596,111 |
|
7,124,804 |
|
|
|
|
|
|
|
QUASI EQUITY |
16 |
3,606,931 |
|
3,451,006 |
|
2,159,380 |
OWNERS' EQUITY |
|
|
|
|
|
|
Share capital |
|
1,015,637 |
|
1,015,637 |
|
1,015,637 |
Treasury shares |
|
(85,705) |
|
(125,525) |
|
(123,293) |
Statutory reserve |
|
47,518 |
|
47,518 |
|
36,995 |
Investment fair value reserve |
|
(39,270) |
|
(46,103) |
|
(55,527) |
Cash flow hedge reserve |
|
- |
|
(2,135) |
|
- |
Other reserve |
|
(16,020) |
|
(13,612) |
|
- |
Retained earnings |
|
41,821 |
|
105,831 |
|
90,860 |
Share grant reserve |
|
5,440 |
|
7,930 |
|
8,530 |
Total equity attributable to shareholders of the Bank |
|
969,421 |
|
989,541 |
|
973,202 |
Non-controlling interests |
|
181,210 |
|
84,821 |
|
78,675 |
TOTAL OWNERS' EQUITY |
|
1,150,631 |
|
1,074,362 |
|
1,051,877 |
TOTAL LIABILITIES, QUASI EQUITY AND OWNERS' EQUITY |
|
10,888,614 |
|
11,121,479 |
|
10,336,061 |
The Board of Directors approved the condensed consolidated interim financial information on 12 August 2024 and signed on its behalf by:
Abdulmohsen Rashed Alrashed Hisham Alrayes
Chairman Chief Executive Officer & Board member
The accompanying notes 1 to 23 form an integral part of the condensed consolidated interim financial information.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
for the six months period ended 30 June 2024 US$ 000's
|
|
Six months ended |
|
Three months ended |
||
|
Note
|
30 June 2024 (reviewed)
|
30 June 2023 (reviewed)
|
|
30 June 2024 (reviewed)
|
30 June 2023 (reviewed)
|
Investment banking |
|
|
|
|
|
|
Deal related income |
|
59,902 |
80,890 |
|
26,670 |
38,726 |
Asset management |
|
28,226 |
9,627 |
|
15,300 |
6,704 |
|
|
88,128 |
90,517 |
|
41,970 |
45,430 |
Commercial banking |
|
|
|
|
|
|
Income from financing |
|
62,394 |
53,704 |
|
31,187 |
26,485 |
Treasury and investment income |
|
49,293 |
45,464 |
|
23,135 |
19,951 |
Fee and other income |
|
15,463 |
14,629 |
|
7,522 |
9,161 |
Commercial banking finance cost |
|
(54,607) |
(45,170) |
|
(28,060) |
(26,592) |
|
|
72,543 |
68,627 |
|
33,784 |
29,005 |
Treasury and Proprietary Investments |
|
|
|
|
|
|
Finance and treasury portfolio income, net |
|
89,070 |
121,990 |
|
48,487 |
64,308 |
Direct investment income, net |
|
79,149 |
4,152 |
|
19,531 |
1,097 |
Income from co-investments |
|
14,696 |
21,629 |
|
7,883 |
13,933 |
Share of profit from equity-accounted investees |
|
12,589 |
17,244 |
|
5,556 |
10,426 |
Income from sale of assets |
|
46,850 |
5,713 |
|
36,727 |
5,641 |
Leasing and operating income |
|
14,147 |
8,877 |
|
9,275 |
4,447 |
Other income |
|
1,713 |
2,340 |
|
832 |
390 |
Finance expenses - Repo and FI |
|
(86,655) |
(124,875) |
|
(34,788) |
(63,518) |
|
|
171,559 |
57,070 |
|
93,503 |
36,724 |
Total income |
|
332,230 |
216,214 |
|
169,257 |
111,159 |
|
|
|
|
|
|
|
Finance expense - term financing and others |
|
33,448 |
31,359 |
|
19,666 |
10,598 |
Impairment allowances, net |
17 |
18,605 |
6,952 |
|
4,819 |
6,316 |
Other expenses |
|
111,814 |
78,266 |
|
50,202 |
37,166 |
Total expenses |
|
163,867 |
116,577 |
|
74,687 |
54,080 |
|
|
|
|
|
|
|
Profit for the period before attribution to quasi equity |
|
168,363 |
99,637 |
|
94,570 |
57,079 |
Less: Net profit attributable to quasi-equity |
|
(100,466) |
(42,448) |
|
(57,016) |
(24,328) |
Profit for the period |
|
67,897 |
57,189 |
|
37,554 |
32,751 |
Profit attributable to: |
|
|
|
|
|
Shareholders of the Bank |
60,747 |
54,616 |
|
33,612 |
30,609 |
Non-controlling interests |
7,150 |
2,573 |
|
3,942 |
2,142 |
|
67,897 |
57,189 |
|
37,554 |
32,751 |
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
Basic and diluted earnings per share (US cents) 18 |
1.71 |
1.55 |
|
0.93 |
0.86 |
Abdulmohsen Rashed Alrashed Hisham Alrayes
Chairman Chief Executive Officer & Board member
The accompanying notes 1 to 23 form an integral part of the condensed consolidated interim financial information.
CONDESNED CONSOLIDATED STATEMENT OF TOTAL COMPREHENSIVE INCOME
for the six months period ended 30 June 2024 US$ 000's
|
|
Six months ended |
|
Three months ended |
||
|
|
30 June 2024 |
30 June 2023 |
|
30 June 2024 |
30 June 2023 |
|
|
(reviewed) |
(reviewed) |
|
(reviewed) |
(reviewed) |
Profit for the period |
|
67,897 |
57,189 |
|
37,554 |
32,751 |
|
|
|
|
|
|
|
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 |
|
6,013 |
2,311 |
|
3,035 |
(3,092) |
Fair value changes on equity investments carried at fair value through OCI |
|
(3,977) |
(5,122) |
|
(5,545) |
(22) |
Attributable to quasi-equity |
|
(290) |
- |
|
(427) |
- |
Total other comprehensive income for the period |
|
1,746 |
(2,811) |
|
(2,937) |
(3,114) |
Total comprehensive income |
|
69,643 |
54,378 |
|
34,617 |
29,637 |
|
|
|
|
|
|
|
Total comprehensive income attributable to: |
|
|
|
|
|
|
Shareholders of the Bank |
|
67,307 |
52,284 |
|
31,405 |
27,707 |
Non-controlling interests |
|
2,336 |
2,094 |
|
3,212 |
1,930 |
|
|
69,643 |
54,378 |
|
34,617 |
29,637 |
The accompanying notes 1 to 23 form an integral part of the condensed consolidated interim financial information.
CONDENSED CONSOLIDATED STATEMENT OF INCOME AND ATTRIBUTION RELATED TO QUASI-EQUITY
For the six months period ended 30 June 2024 US$ 000's
|
|
Six months ended |
|
Three months ended |
||
|
|
30 June 2024 |
30 June 2023 |
|
30 June 2024 |
30 June 2023 |
|
|
(reviewed) |
(reviewed) |
|
(reviewed) |
(reviewed) |
Net operating income attribution to quasi equity |
|
168,363 |
99,637 |
|
94,570 |
57,079 |
Adjusted for: |
|
|
|
|
|
|
Less: income not attributable to quasi-equity |
|
(152,463) |
(184,363) |
|
(76,707) |
(115,694) |
Add: Profit expense on due to banks and non-banks |
|
60,944 |
52,223 |
|
30,496 |
28,939 |
Add: expenses not attributable to quasi-equity |
|
157,952 |
152,886 |
|
72,335 |
90,389 |
Less: institution's share of income for its own/ share of investments |
|
(79,968) |
(55,428) |
|
(38,944) |
(25,846) |
Less: allowance for impairment allowances attributable to quasi-equity |
|
5,570 |
(9,610) |
|
3,289 |
(9,597) |
Total income available for quasi-equity holders |
|
160,398 |
55,345 |
|
85,039 |
25,270 |
Profit equalization reserve - net movement |
|
- |
- |
|
- |
- |
Total income attributable to quasi-equity holders (adjusted for reserves) |
|
160,398 |
55,345 |
|
85,039 |
25,270 |
Less: Mudarib's share |
|
(5,074) |
(8,375) |
|
(1,850) |
(942) |
Less: Wakala fees |
|
(54,858) |
(4,522) |
|
(26,173) |
- |
Net income attributable to quasi-equity |
|
100,466 |
42,448 |
|
57,016 |
24,328 |
Investment risk reserve -net movement |
|
- |
- |
|
- |
- |
|
|
|
|
|
|
|
Profit distributable to quasi-equity |
|
100,466 |
42,448 |
|
57,016 |
24,328 |
Other comprehensive income that may subsequently be classified to statement of income |
|
290 |
- |
|
427 |
- |
Total comprehensive income - attributable to quasi-equity |
|
100,756 |
42,448 |
|
57,443 |
24,328 |
Add: Other comprehensive income not subject to immediate distribution |
|
(290) |
- |
|
(427) |
- |
Net profit attributable to quasi-equity |
|
100,466 |
42,448 |
|
57,016 |
24,328 |
The accompanying notes 1 to 23 form an integral part of the condensed consolidated interim financial information.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN OWNERS' EQUITY
for the six months period ended 30 June 2024 US$ 000's
|
|
|
Attributable to shareholders of the Bank |
|
Total owners' equity |
||||||||
30 June 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 |
- |
- |
- |
- |
- |
- |
60,747 |
- |
60,747 |
7,150 |
67,897 |
||
Other comprehensive income |
- |
- |
- |
2,135 |
(2,408) |
6,833 |
- |
- |
6,560 |
(4,814) |
1,746 |
||
Total comprehensive income for the period |
- |
- |
- |
2,135 |
(2,408) |
6,833 |
60,747 |
- |
67,307 |
2,336 |
69,643 |
||
|
|
|
|
|
|
|
|
|
|
|
|
||
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 |
- |
174,422 |
- |
- |
- |
- |
(20,941) |
- |
153,481 |
- |
153,481 |
||
Purchase of treasury shares |
- |
(134,602) |
- |
- |
- |
- |
- |
- |
(134,602) |
- |
(134,602) |
||
Additional NCI without a change in control (note 1) |
- |
- |
- |
- |
- |
- |
(35,779) |
- |
(35,779) |
124,650 |
88,871 |
||
Sale of shares in subsidiary
|
- |
- |
- |
- |
- |
- |
- |
- |
- |
(37,937) |
(37,937) |
||
Reduction in NCI due to additional stake in subsidiary (note 1) |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(4,947) |
(4,947) |
||
Additional NCI on acquisition of subsidiary (note 23) |
- |
- |
- |
- |
- |
- |
- |
- |
- |
12,287 |
12,287 |
||
Balance at 30 June 2024 |
1,015,637 |
(85,705) |
47,518 |
- |
(16,020) |
(39,270) |
41,821 |
5,440 |
969,421 |
181,210 |
1,150,631 |
||
The accompanying notes 1 to 23 form an integral part of the condensed consolidated interim financial information.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN OWNERS' EQUITY
for the six months period ended 30 June 2024 (continued) US$ 000's
|
Attributable to shareholders of the Bank |
|
|
||||||
30 June 2023 (reviewed) |
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 |
- |
- |
- |
- |
54,616 |
- |
54,616 |
2,573 |
57,189 |
Other comprehensive income |
- |
- |
- |
(2,332) |
- |
- |
(2,332) |
(479) |
(2,811) |
Total comprehensive income for the period |
- |
- |
- |
(2,332) |
54,616 |
- |
52,284 |
2,094 |
54,378 |
|
|
|
|
|
|
|
|
|
|
Long Term Incentive Plan (LTIP) |
- |
- |
- |
- |
- |
1,600 |
1,600 |
- |
1,600 |
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 |
- |
(47,169) |
- |
- |
- |
- |
(47,169) |
- |
(47,169) |
Sale of treasury shares |
- |
29,474 |
- |
- |
(2,326) |
- |
27,148 |
- |
27,148 |
Additional NCI without a change in control |
- |
- |
- |
- |
- |
- |
- |
5,747 |
5,747 |
Reduction in NCI due to loss of control |
- |
- |
- |
- |
- |
- |
- |
(3,960) |
(3,960) |
Balance at 30 June 2023 |
1,015,637 |
(123,293) |
36,995 |
(55,527) |
90,860 |
8,530 |
973,202 |
78,675 |
1,051,877 |
The accompanying notes 1 to 23 form an integral part of the condensed consolidated interim financial information.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS-
for the six months period ended 30 June 2024 US$ 000's
|
30 June 2024 (reviewed) |
|
30 June 2023 (reviewed) |
OPERATING ACTIVITIES |
|
|
|
Profit for the period |
67,897 |
|
57,189 |
Adjustments for: |
|
|
|
Treasury and proprietary investments |
(258,214) |
|
(181,945) |
Foreign exchange loss |
2,608 |
|
2,238 |
Finance expense |
275,176 |
|
201,403 |
Impairment allowances, net |
18,605 |
|
6,952 |
Depreciation and amortisation |
6,333 |
|
4,299 |
|
112,405 |
|
90,136 |
Changes in: |
|
|
|
Placements with financial institutions (original maturities of more than 3 months) |
68,074 |
|
418,680 |
Financing assets |
(145,944) |
|
(106,914) |
Receivable and other assets |
(214,592) |
|
(142,303) |
CBB Reserve and restricted bank balance |
(4,974) |
|
(8,230) |
Clients' funds |
(57,626) |
|
27,890 |
Customer current accounts |
270,810 |
|
94,597 |
Placements from financial, non-financial institutions and individuals |
(160,831) |
|
(713,145) |
Quasi equity |
155,925 |
|
945,706 |
Other liabilities |
(236,903) |
|
168,750 |
Net cash (used in) / generated from operating activities |
(213,656) |
|
775,167 |
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
Payments for purchase of equipment |
(2,973) |
|
(2,581) |
Purchase of proprietary investment securities, net |
- |
|
(52,891) |
Purchase of treasury portfolio, net |
(8,500) |
|
(237,445) |
Cash acquired on acquisition of subsidiary |
5,584 |
|
1,346 |
Cash paid on acquisition of subsidiary |
- |
|
(7,000) |
Cash paid on acquisition of additional stake in subsidiary |
(4,000) |
|
- |
Proceeds from sale of real estate |
64,224 |
|
11,771 |
Dividends received from proprietary investments and co-investments |
28,790 |
|
20,659 |
Payment for Purchase of real estate |
(1,208) |
|
(12,026) |
Net cash generated from /(used in) investing activities |
81,917 |
|
(278,167) |
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
Financing liabilities, net |
(75,872) |
|
33,773 |
Finance expense paid |
(244,051) |
|
(153,228) |
Dividends paid |
(58,865) |
|
(57,860) |
Sale/(Purchase) of treasury shares, net |
39,827 |
|
(17,694) |
Net cash used in financing activities |
(338,961) |
|
(195,009) |
|
|
|
|
Net (decrease) / increase in cash and cash equivalents during the period |
(470,700) |
|
301,991 |
Cash and cash equivalents at 1 January |
1,687,727 |
|
1,041,064 |
|
|
|
|
Cash and cash equivalents at 30 June * |
1,217,027 |
|
1,343,055 |
|
|
|
|
|
|
|
|
Cash and cash equivalents comprise: |
|
|
|
Cash and balances with banks (excluding CBB reserve balance and restricted cash) |
209,130 |
|
320,958 |
Placements with financial institutions (original maturities of 3 months or less) |
1,007,897 |
|
1,022,097 |
|
1,217,027 |
|
1,343,055 |
* net of expected credit loss of US$ 26 thousands (30 June 2023: US$ 31 thousands).
The accompanying notes 1 to 23 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 six months period ended 30 June 2024 US$ 000's
30 June 2024 (Reviewed)
|
Opening Balance |
Additions during the period |
Distribution/ NAV Movement |
Income |
Expenses |
Group fees |
Closing Balance |
Real Estate |
9,142,438 |
438,273 |
(394,512) |
98,339 |
(78,623) |
(19,716) |
9,186,199 |
Private Equity |
709,755 |
155,500 |
(168,053) |
27,586 |
(19,627) |
(8,510) |
696,651 |
As at 30 June 2024 |
9,852,193 |
593,773 |
(562,565) |
125,925 |
(98,250) |
(28,226) |
9,882,850 |
The above assets under management are also funded by financing arrangements at the level of operations amounting to US$ 3.82 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$ 278,371 thousand (31 Dec 2023: US$ 254,610 thousand).
30 June 2023 (Reviewed) |
Opening Balance |
Additions during the period |
Distribution/ NAV Movement |
Income |
Expenses |
Group fees |
Closing Balance |
Real Estate |
7,132,745 |
542,722 |
(447,877) |
35,131 |
(26,353) |
(8,777) |
7,227,591 |
Private Equity |
584,187 |
380,854 |
(323,858) |
7,864 |
(7,014) |
(850) |
641,183 |
As at 30 June 2023 |
7,716,932 |
923,576 |
(771,735) |
42,995 |
(33,367) |
(9,627) |
7,868,774 |
The above assets under management are also funded by financing arrangements at the level of operations amounting to US$ 3.27 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$ 169,471 million (31 Dec 2022: US$ 142,051 thousand).
The accompanying notes 1 to 23 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 six months ended 30 June 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 June 2024 |
Activities |
GFH Partners Ltd (formally known as GFH Capital 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')* |
57.95% |
Islamic retail bank |
|
GFH Equities BSC (c)** |
76.63% |
Investment management |
*During the period, the Group's stake in KHALEEJI was diluted due to capital increase. The effective ownership as on 30 June 2024 is 57.95% (31 December 2023: 85.41%).
** During the period, 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, amemdments 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.
a. 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 June 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 |
953,060 |
- |
- |
73,471 |
1,026,531 |
3 |
Other Capital Instruments |
- |
- |
- |
- |
- |
4 |
Retail deposits and deposits from small business customers: |
|
|
|
|
|
5 |
Stable deposits |
|
161,520 |
42,773 |
2,964 |
197,043 |
6 |
Less stable deposits |
- |
2,457,037 |
734,449 |
133,885 |
3,006,223 |
7 |
Wholesale funding: |
|
|
|
|
|
8 |
Operational deposits |
|
|
|
|
|
9 |
Other Wholesale funding |
- |
3,650,787 |
1,342,099 |
873,354 |
4,830,111 |
10 |
Other liabilities: |
|
|
|
|
|
11 |
NSFR Shari'a-compliant hedging contract liabilities |
|
- |
- |
- |
|
12 |
All other liabilities not included in the above categories |
- |
370,447 |
- |
61,802 |
61,802 |
13 |
Total ASF |
|
|
|
|
9,121,709 |
Required Stable Funding (RSF): |
||||||
14 |
Total NSFR high-quality liquid assets (HQLA) |
1,953,905.05 |
- |
- |
- |
98,293 |
15 |
Depsoits held at other financial institutions for opetational purposes |
|
|
|
|
|
16 |
Performing financing and sukuk/ securities: |
- |
1,301,248 |
- |
1,160,492 |
1,181,605 |
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 |
- |
74,928 |
77,516 |
1,146,167 |
1,050,465 |
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 |
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: |
- |
124,931 |
123,120 |
366,961 |
362,550 |
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 |
- |
962,862 |
146,125 |
444,612 |
999,106 |
24 |
Other assets: |
|
|
|
|
|
25 |
Physical traded commodities, including gold |
- |
|
|
|
- |
26 |
Assets posted as initial margin for Shari'a-compliant hedging contracts contracts and |
|
- |
- |
- |
- |
27 |
NSFR Shari'a-compliant hedging assets |
|
- |
- |
- |
896 |
28 |
NSFR Shari'a-compliant hedging contract liabilities before deduction of variation |
|
- |
- |
- |
- |
29 |
All other assets not included in the above categories |
3,144,346 |
- |
- |
- |
3,144,346 |
30 |
OBS items |
|
- |
- |
- |
74,655 |
31 |
Total RSF |
|
2,463,970 |
346,761 |
3,118,232 |
6,911,916 |
32 |
NSFR(%) |
|
|
|
|
132% |
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 |
|
- |
- |
- |
- |
27 |
NSFR Shari'a-compliant hedging assets |
|
- |
- |
- |
2,195 |
28 |
NSFR Shari'a-compliant hedging contract liabilities before deduction of variation |
|
- |
- |
- |
- |
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 June 2024 (reviewed) |
31 December 2023 (audited) |
|
|
|
Stock of HQLA |
561,223 |
444,865 |
Net cashflows |
237,299 |
196,313 |
LCR % |
240% |
233% |
|
|
|
Minimum required by CBB |
100% |
100% |
5 FINANCIAL RISK MANAGEMENT (continued)
c. Capital Adequacy Ratio
|
30 June 2024 (reviewed) |
31 December 2023 (audited) |
|
|
|
CET 1 Capital before regulatory adjustments |
1,002,368 |
1,023,275 |
Less: regulatory adjustments |
- |
- |
|
|
|
CET 1 Capital after regulatory adjustments |
1,002,368 |
1,023,275 |
AT1 Capital |
9,862 |
- |
T 2 Capital adjustments |
73,471 |
64,133 |
Regulatory Capital |
1,085,701 |
1,087,409 |
|
|
|
Risk weighted exposure: |
|
|
Credit Risk Weighted Assets |
5,328,436 |
4,585,950 |
Market Risk Weighted Assets |
153,717 |
90,135 |
Operational Risk Weighted Assets |
511,093 |
506,408 |
Total Regulatory Risk Weighted Assets |
5,993,246 |
5,182,493 |
|
|
|
Investment risk reserve (30% only) |
2 |
2 |
Profit equalization reserve (30% only) |
3 |
3 |
Total Adjusted Risk Weighted Exposures |
5,993,241 |
5,182,488 |
|
|
|
Capital Adequacy Ratio (CAR) |
18.12% |
20.98% |
Tier 1 Capital Adequacy Ratio |
16.89% |
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 six-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 June 2024 |
|
31 December 2023 |
|
30 June 2023 |
|
(reviewed) |
|
(audited) |
|
(reviewed) |
|
|
|
|
|
|
Placements with financial institutions |
1,011,100 |
|
1,458,368 |
|
1,079,143 |
|
|
|
|
|
|
Derivatives At fair value through statement of income |
896 |
|
2,195 |
|
3,035 |
|
|
|
|
|
|
Equity type investments |
|
|
|
|
|
At fair value through OCI - Quoted sukuk |
32,889 |
|
33,326 |
|
33,008 |
|
|
|
|
|
|
At fair value through statement of income |
|
|
|
|
|
- Structured notes* |
437,723 |
|
404,839 |
|
390,631 |
- Quoted fund |
26,347 |
|
27,099 |
|
28,803 |
|
|
|
|
|
|
Debt type investments |
|
|
|
|
|
At fair value through OCI* |
|
|
|
|
|
- Quoted sukuk |
791,535 |
|
784,300 |
|
805,585 |
|
|
|
|
|
|
At amortised cost |
|
|
|
|
|
- Quoted sukuk * |
2,487,772 |
|
2,447,489 |
|
2,619,503 |
- Unquoted sukuk |
4,546 |
|
3,494 |
|
3,494 |
|
|
|
|
|
|
Less: Impairment allowances |
(24,735) |
|
(26,078) |
|
(19,075) |
|
|
|
|
|
|
|
4,768,073 |
|
5,135,032 |
|
4,944,127 |
* Short-term and medium-term facilities of US$ 1,727,513 thousand (31 December 2023: US$ 1,857,388 thousand) are secured by quoted sukuk of US$ 2,986,593 thousand (31 December 2023: US$ 2,762,506 thousand) and structured notes of US$ 437,723 thousand (31 December 2023: US$ 404,839 thousand).
9 Financing CONTRACTS
|
30 June 2024 |
|
31 December 2023 |
|
30 June 2023 |
|
(reviewed) |
|
(audited) |
|
(reviewed) |
|
|
|
|
|
|
Murabaha* |
1,290,801 |
|
1,029,324 |
|
1,016,521 |
Wakala |
- |
|
- |
|
239 |
Mudharaba |
20,862 |
|
20,564 |
|
18,652 |
Ijarah assets |
550,890 |
|
559,200 |
|
571,112 |
|
1,862,553 |
|
1,609,088 |
|
1,606,524 |
Less: Impairment allowances |
(66,800) |
|
(64,278) |
|
(71,129) |
|
|
|
|
|
|
|
1,795,753 |
|
1,544,810 |
|
1,535,395 |
*Murabaha financing receivables are net of deferred profits of US$ 36,247 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) |
1,485,710 |
233,902 |
142,941 |
1,862,553 |
Expected credit loss |
(7,652) |
(10,178) |
(48,970) |
(66,800) |
Financing contracts (net) |
1,478,058 |
223,724 |
93,971 |
1,795,753 |
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 |
5,372 |
(7,308) |
1,936 |
- |
Net charge for the period |
(2,508) |
(824) |
7,198 |
3,866 |
Write-offs |
- |
- |
(1,344) |
(1,344) |
At 30 June 2024 (reviewed) |
7,652 |
10,178 |
48,970 |
66,800 |
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 |
Financing assets |
Stage 1 |
Stage 2 |
Stage 3 |
Total |
|
|
|
|
|
Financing assets (gross) |
1,219,642 |
291,391 |
95,491 |
1,606,524 |
Expected credit loss |
(6,144) |
(28,374) |
(36,611) |
(71,129) |
Financing assets (net) |
1,213,498 |
263,017 |
58,880 |
1,535,395 |
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 |
(5,082) |
3,774 |
1,308 |
- |
Net charge for the period |
(6,820) |
12,610 |
967 |
6,757 |
At 30 June 2023 (reviewed) |
6,144 |
28,374 |
36,611 |
71,129 |
10 Investment in real estate
|
30 June 2024 |
|
31 December 2023 |
|
30 June 2023 |
|
(reviewed) |
|
(audited) |
|
(reviewed) |
Investment Property |
|
|
|
|
|
- Land |
448,694 |
|
483,685 |
|
572,314 |
- Building |
124,305 |
|
141,471 |
|
199,177 |
|
572,999 |
|
625,156 |
|
771,491 |
Development Property |
|
|
|
|
|
- Land |
165,727 |
|
165,565 |
|
154,183 |
- Building |
505,770 |
|
581,211 |
|
395,315 |
|
671,497 |
|
746,776 |
|
549,498 |
|
|
|
|
|
|
|
1,244,496 |
|
1,371,932 |
|
1,320,989 |
11 Co-investments
|
30 June 2024 |
|
31 December 2023 |
|
30 June 2023 |
|
(reviewed) |
|
(audited) |
|
(reviewed) |
At fair value through OCI |
|
|
|
|
|
- Unquoted securities |
270,584 |
|
247,048 |
|
160,532 |
|
|
|
|
|
|
At fair value through statement of income |
|
|
|
|
|
- Unquoted securities Impairment allowance |
9,393 (1,606) |
|
9,168 (1,606) |
|
8,939 - |
|
|
|
|
|
|
|
278,371 |
|
254,610 |
|
169,471 |
12 Proprietary investments
|
30 June 2024 |
|
31 December 2023 |
|
30 June 2023 |
|
(reviewed) |
|
(audited) |
|
(reviewed) |
Equity type investments |
|
|
|
|
|
At fair value through statement of income |
|
|
|
|
|
- Unquoted securities |
9,942 |
|
2,942 |
|
2,942 |
- Listed securities |
11,266 |
|
14,252 |
|
14,830 |
|
21,208 |
|
17,194 |
|
17,772 |
At fair value through OCI |
|
|
|
|
|
- Listed securities (at fair value) |
20,035 |
|
- |
|
- |
- Equity type Sukuk |
940,382 |
|
827,012 |
|
833,051 |
- Unquoted securities |
60,598 |
|
64,045 |
|
56,999 |
|
1,021,015 |
|
891,057 |
|
890,050 |
|
|
|
|
|
|
Equity-accounted investees |
142,810 |
|
137,390 |
|
125,932 |
Impairment allowance |
(1,966) |
|
(914) |
|
(11) |
|
1,183,067 |
|
1,044,727 |
|
1,033,743 |
13 RECEIVABLES AND OTHER ASSETS
|
30 June 2024 |
|
31 December 2023 |
|
30 June 2023 |
|
(reviewed) |
|
(audited) |
|
(reviewed) |
|
|
|
|
|
|
Investment banking receivables* |
305,611 |
|
307,597 |
|
206,390 |
Receivable from equity-accounted investees |
93,789 |
|
93,318 |
|
89,844 |
Financing to projects, net |
11,695 |
|
12,241 |
|
10,765 |
Receivable on sale of real estate |
132,747 |
|
16,376 |
|
21,787 |
Advances and deposits |
71,938 |
|
62,416 |
|
90,321 |
Employee receivables |
11,192 |
|
7,443 |
|
12,195 |
Profit on sukuk receivable |
20,232 |
|
19,948 |
|
18,172 |
Lease rentals receivable |
3,588 |
|
4,025 |
|
5,460 |
Goodwill and intangibles |
70,523 |
|
45,187 |
|
30,675 |
Receivable from sale of investments |
63,311 |
|
71,281 |
|
- |
Tax receivable |
8,710 |
|
7,327 |
|
6,107 |
Prepayments and other receivables |
276,039 |
|
186,120 |
|
242,229 |
Less: Impairment allowance |
(23,017) |
|
(7,948) |
|
(7,410) |
|
|
|
|
|
|
|
1,046,358 |
|
825,331 |
|
726,535 |
* Subsequent to the period, the amounts due were significantly settled from subscriptions collected in
client money accounts.
14 Term financing
|
30 June 2024 |
|
31 December 2023 |
|
30 June 2023 |
|
(reviewed) |
|
(audited) |
|
(reviewed) |
|
|
|
|
|
|
Murabaha financing* (note 8) |
1,738,485 |
|
1,880,910 |
|
1,716,001 |
Sukuk ** |
241,224 |
|
241,777 |
|
241,807 |
Ijarah financing |
- |
|
- |
|
16,298 |
Other borrowings |
1,639 |
|
1,620 |
|
1,600 |
|
|
|
|
|
|
|
1,981,348 |
|
2,124,307 |
|
1,975,706 |
*Murabaha financing comprise:
Short-term and medium-term facilities of US$ 1,727,513 thousand (31 December 2023: US$ 1,857,388 thousand) are secured by quoted sukuk of US$ 2,986,593 thousand (31 December 2023: US$ 2,762,506 thousand) and structured notes of US$ 437,723 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$ 8,535 thousand.
15 OTHER LIABILITIES
|
|
|
|
|
|
|
30 June 2024 |
|
31 December 2023 |
|
30 June 2023 |
|
(reviewed) |
|
(audited) |
|
(reviewed) |
|
|
|
|
|
|
Investment banking payables* |
97,676 |
|
173,297 |
|
352,981 |
Accounts Payables |
94,423 |
|
48,724 |
|
70,523 |
Unclaimed dividends |
4,447 |
|
2,312 |
|
3,154 |
Payables to equity-accounted investees |
51,415 |
|
107,466 |
|
16,450 |
Other accrued expenses and payables |
34,757 |
|
64,659 |
|
100,248 |
Deferred Income |
10,525 |
|
32,240 |
|
16,804 |
Payables towards purchase of investments |
56,477 |
|
63,068 |
|
25,675 |
Zakah and Charity Fund |
12,517 |
|
6,331 |
|
6,751 |
Advance received from customers** |
2,065 |
|
2,106 |
|
7,869 |
Employee related accruals |
26,195 |
|
24,459 |
|
16,309 |
Mudaraba profit accrual |
12,952 |
|
22,814 |
|
13,021 |
Provision for employees' leaving indemnities |
716 |
|
580 |
|
309 |
|
|
|
|
|
|
|
404,165 |
|
548,056 |
|
630,094 |
*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 June 2024 |
|
31 December 2023 |
|
30 June 2023 |
(reviewed) |
|
(audited) |
|
(reviewed) |
2,347,904 |
|
2,312,153 |
|
994,540 |
1,259,027 |
|
1,138,853 |
|
1,164,840 |
3,606,931 |
|
3,451,006 |
|
2,159,380 |
Financial institutions
Non-financial institutions and individuals
30 June 2024 |
|
31 December 2023 |
|
30 June 2023 |
(reviewed) |
|
(audited) |
|
(reviewed) |
71,061 |
|
50,266 |
|
46,416 |
80,321 |
|
75,310 |
|
76,711 |
2,506,596 |
|
2,202,334 |
|
1,030,986 |
832,775 |
|
1,006,144 |
|
888,480 |
71,061 |
|
71,334 |
|
71,854 |
45,117 |
|
45,618 |
|
44,933 |
|
|
|
|
|
3,606,931 |
|
3,451,006 |
|
2,159,380 |
Balances with banks
CBB reserve account
Treasury portfolio
Financing contracts
Proprietary Investments
Investment in real estate
17 Impairment allowances, net
|
Six months ended |
|
Three months ended |
||
|
30 June 2024 (reviewed) |
30 June 2023 (reviewed) |
|
30 June 2024 (reviewed) |
30 June 2023 (reviewed) |
Expected credit loss on: |
|
|
|
|
|
Bank balances |
(39) |
20 |
|
(36) |
22 |
Treasury portfolio (note 8) |
(1,343) |
2,112 |
|
(365) |
(1,907) |
Financing assets, net (note 9) |
3,866 |
6,757 |
|
1,492 |
8,448 |
|
2,484 |
8,889 |
|
1,091 |
6,563 |
Impairment on proprietary investment (note 12) |
1,052 |
(31) |
|
518 |
(99) |
Impairment on other receivables (note 13) |
15,069 |
(1,906) |
|
3,210 |
(148) |
|
18,605 |
6,952 |
|
4,819 |
6,316 |
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.
|
Six months ended |
|
Three months ended |
||
|
30 June 2024 (reviewed) |
30 June 2023 (reviewed) |
|
30 June 2024 (reviewed) |
30 June 2023 (reviewed) |
Profit attributable to shareholders of the Bank |
60,747 |
54,616 |
|
33,612 |
30,609 |
Weighted Average number of shares outstanding during the period |
3,558,268 |
3,528,590 |
|
3,599,595 |
3,547,177 |
Earnings per share |
|
|
|
|
|
Basic and diluted earnings per share (US cents) |
1.71 |
1.55 |
|
0.93 |
0.86 |
19 Related party transactions
The significant related party balances and transactions as at 30 June 2024 are given below:
|
Related parties as per FAS 1 |
Assets under management (including special purpose and other entities) |
Total |
||
30 June 2024 (reviewed) |
Equity-accounted investees |
Key management personnel |
Significant shareholders / entities in which directors are interested |
||
Assets |
|
|
|
|
|
Treasury portfolio |
- |
- |
- |
69,969 |
69,969 |
Financing contracts |
- |
11,106 |
227,652 |
17,368 |
256,126 |
Proprietary investments |
940,382 |
- |
6,058 |
9,355 |
955,795 |
Co-investments |
- |
- |
- |
278,371 |
278,371 |
Receivables and other assets |
98,022 |
10,299 |
199 |
305,611 |
414,131 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Placements from financial, non-financial institutions and individuals |
- |
4,536 |
222,917 |
- |
227,453 |
Current accounts |
2,851 |
313 |
112,446 |
18,995 |
134,605 |
Other liabilities |
51,419 |
10,616 |
- |
97,676 |
159,711 |
|
|
|
|
|
|
Quasi equity |
5,459 |
4,796 |
117,967 |
14,780 |
143,002 |
|
|
|
|
|
|
Income |
|
|
|
|
|
Investment banking |
726 |
- |
- |
88,965 |
89,691 |
Commercial banking |
|
|
|
|
|
- Income from financing |
- |
302 |
1,562 |
- |
1,864 |
- Less: Finance expense |
- |
(135) |
(8,141) |
- |
(8,276) |
Treasury and proprietary investments |
16,793 |
- |
- |
40,063 |
56,856 |
Less: Quasi equity |
(29) |
(119) |
(6,273) |
(8) |
(6,429) |
Expenses |
|
|
|
|
|
Operating expenses |
- |
(345) |
- |
(167) |
(512) |
Staff Cost |
- |
(6,452) |
(280) |
- |
(6,732) |
Finance Cost |
(12) |
- |
- |
(3,462) |
(3,474) |
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 June 2023 (reviewed) |
|
|
|
|
|
Income |
|
|
|
|
|
Investment banking |
- |
- |
- |
81,851 |
81,851 |
Commercial banking |
|
|
|
|
|
- Income from financing |
- |
324 |
133 |
- |
457 |
- Less: Return to quasi equity |
(24) |
(117) |
(2,653) |
(8) |
(2,802) |
- Less: Finance expense |
- |
(125) |
(6,430) |
- |
(6,555) |
Treasury and proprietary investments |
17,251 |
- |
403 |
3,536 |
21,190 |
|
|
|
|
|
|
Expenses |
|
|
|
|
|
Operating expenses |
(3) |
(790) |
- |
(37) |
(830) |
Staff Cost |
- |
(5,670) |
(347) |
- |
(6,017) |
Finance Cost |
- |
- |
- |
(1,262) |
(1,262) |
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
for the six months ended 30 June 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 June 2024 (reviewed) |
|
|
|
|
Segment revenue |
88,128 |
65,188 |
178,914 |
332,230 |
Segment expenses |
(57,767) |
(47,089) |
(140,872) |
(245,728) |
Impairment allowance |
- |
(4,470) |
(14,135) |
(18,605) |
Segment result |
30,361 |
13,629 |
23,907 |
67,897 |
Segment assets |
230,676 |
3,953,869 |
6,704,069 |
10,888,614 |
Segment liabilities |
146,605 |
2,377,424 |
3,607,023 |
6,131,052 |
Quasi equity |
- |
1,253,525 |
2,353,406 |
3,606,931 |
Other segment information |
|
|
|
|
Proprietary investments (Equity-accounted investees) |
- |
17,219 |
125,591 |
142,810 |
Commitments |
17,778 |
104,114 |
38,338 |
160,230 |
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
for the six months ended 30 June 2024 ` US$ 000's
20 Segment reporting (continued)
|
Investment banking |
Commercial banking |
Proprietary and treasury |
Total |
30 June 2023 (reviewed) |
|
|
|
|
Segment revenue |
90,517 |
41,242 |
84,455 |
216,214 |
Segment expenses |
(62,510) |
(24,469) |
(65,094) |
(152,073) |
Impairment allowance |
- |
(2,857) |
(4,095) |
(6,952) |
Segment result |
28,007 |
13,916 |
15,266 |
57,189 |
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 June 2024 (reviewed) |
|
31 December 2023 (audited) |
|
30 June 2023 (reviewed) |
|
|
|
|
|
|
Undrawn commitments to extend finance |
97,080 |
|
113,873 |
|
126,804 |
Financial guarantees |
17,815 |
|
40,677 |
|
43,852 |
Capital commitment for infrastructure development projects |
45,335 |
|
49,147 |
|
55,485 |
|
|
|
|
|
|
|
160,230 |
|
203,697 |
|
226,141 |
Performance obligations
During the ordinary course of business, the Group may enter performance obligations in respect of its infrastructure development projects. It is the 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 June 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 June 2024 (reviewed) |
|
30 June 2023 (reviewed) |
||
|
Statement of Income |
FVOCI |
|
Statement of Income |
FVOCI |
Equity instruments- marketability factor (±10%) |
±939 |
±33,118 |
|
±894 |
±21,753 |
Structure notes- impact in underlying value (±5%) |
±21,886 |
- |
|
±19,532 |
- |
Derivative and Fund- impact in underlying value (±5%) |
±1,362 |
- |
|
±1,592 |
- |
22 Financial instruments (continued)
The table below analyses the financial instruments carried at fair value, by valuation method.
30 June 2024 (reviewed) |
Level 1 |
Level 2 |
Level 3 |
Total |
i) Proprietary investments |
|
|
|
|
Investment securities carried at fair value through: |
|
|
|
|
- statement of income |
21,208 |
- |
- |
21,208 |
- OCI |
20,035 |
940,382 |
60,598 |
1,021,015 |
|
41,243 |
940,382 |
60,598 |
1,042,223 |
ii) Treasury portfolio |
|
|
|
|
Investment securities carried at fair value through: |
|
|
|
|
- statement of income |
- |
464,966 |
- |
464,966 |
- OCI |
824,424 |
- |
- |
824,424 |
|
824,424 |
464,966 |
- |
1,289,390 |
iii) Co-investments |
|
|
|
|
Investment securities carried at fair value through |
|
|
|
|
- OCI |
- |
- |
270,584 |
270,584 |
- statement of income |
- |
- |
9,393 |
9,393 |
|
- |
- |
279,977 |
279,977 |
|
|
|
|
|
|
855,725 |
1,405,348 |
340,575 |
2,611,590 |
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 June 2024 |
|
31 December 2023 |
|
(reviewed) |
|
(audited) |
|
|
|
|
At beginning of the period |
320,261 |
|
197,944 |
Disposals at carrying value |
(5,771) |
|
(3,682) |
Purchases / reclassification |
25,859 |
|
127,134 |
Fair value changes during the period |
226 |
|
(1,135) |
At end of the period |
340,575 |
|
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 |
|
2,803 |
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 |