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253 Million Dollars GIC's Net profit after provisions.

Wednesday February 20, 2008

During the meeting held on 20th February 2008 in Kuwait, the Board of Gulf Investment Corporation reviewed and approved the audited financial statements for the year 2007 with net profit 253 Million Dollars after provisions, it represents credit and return on equity of 15%.

Commenting on GIC's results, The Chairman of the Board H.E. Dr. Yousef Hamad Al Ebraheem, said: "GIC achieved good results particularly in such a difficult year where the international capital markets in general and liquidity markets in particular faced one of the hardest shakes. GIC once again proved its ability to achieve good results reflecting sound strategic planning in its diversified assets and revenue sources and managing the risks in scientific methods.

GIC successfully won the bid to construct and develop Shuqaiq and Marafiq , two major Power & Utilities projects in Saudi Arabia, taking into consideration that Marafiq project won the international awards for Best Energy project in the Middle East, Europe and Africa. In 2007 El Ezzel Power Project and the Stainless steel factory in Bahrain became operational; in addition, the iron pellets factory doubled its capacity".

Dr. Al Ebraheem also mentioned GIC's intention to open branches in some of the GCC countries in 2008 to execute its expansion strategy in the coming five years.

GIC has a well diversified portfolio of good quality assets and good geographical distribution. In building its balance sheet, GIC uses advanced methods in risk diversification and capital allocation.

Mr. Hisham A. Al-Razzuqi – Chief Executive Officer added: "GIC made provisions for the impairment in the value of its portfolio of Structured credits and SIV’s amounted to US $246 million. 

It is worth mentioning that these SIV’s did not suffer from the quality of its underlying assets but the main problem was the lack of liquidity internationally, which affected the way and the cost of financing these funds. The exposure to Sub Prime and monoline insurers is very limited and of good quality. The value of the unrated Sub Prime and monoline is limited and GIC has made full provision for it."

Mr. Al-Razzuqi added: "GIC achieved good results from its various investment activities in hedge funds and GCC Equities, also the projects portfolio achieved good results that were not totally added to the year results according to international accounting standards.

Despite the mentioned provisions, the results of various activities added US $283 million to the corporation's capital base to reach approx. 2000 Million Dollars with a total capital ratio of 20% computed as per Basel II guidelines.

The Corporation, with an authorized capital of US$ 2.1 billion, continues to be one of the most strongly capitalized financial institutions within the region. Gulf Investment Corporation is a leading regional financial institution that was established under the auspices of the Gulf Cooperation Council and is equally owned by the six member states of the Council: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

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