Q2 2026 GFH Bank BSC Earnings Call
Speaker #1: Good afternoon, everyone, and welcome to GFH's Q2 results call. This is Ahmed Al-Shazli from EFJMS, and it's a pleasure to have with us on the call today members of management.
Speaker #1: Mr. Hishab Al-Rais, your CEO and board member; Mr. Rajiv Gogeya, Group CFO; and Ms. Iman Mohammad, Executive Director of Strategy and Shareholder Relations. I will now hand the call over to Ms. Iman to start with the presentation.
Speaker #2: Good afternoon, everyone, and thank you for joining the GFH Bank earnings call for the first half of 2026. We will take you through the key highlights, financial performance, and business updates for the period.
Speaker #2: Following this, we will open the floor for questions. The Q&A session will be addressed directly by our CEO. You are welcome to submit your questions at any time during the presentation through the chat function.
Speaker #2: I'm pleased to share that GFH delivered a resilient first-half performance, reflecting the strength of our diversified business model, disciplined execution, and the effectiveness of our strategy.
Speaker #2: The first half was marked by a challenging regional environment. At the same time, the performance we have delivered this half under these circumstances validates our strategic direction and the strategy we have pursued over recent years.
Speaker #2: Our diversification across geographies, business lines, and income streams has provided us with the stability and flexibility to absorb these external pressures, while also positioning us to benefit from the shift in the market.
Speaker #2: In fact, the geopolitical situation has created opportunities in certain areas, and our agile strategy has enabled us to respond quickly and selectively to capture these opportunities and continue creating value for our shareholders.
Speaker #2: Further positive validation of our performance and financial resilience came from the credit rating agencies, which affirmed GFH’s ratings at B and maintained a stable outlook on our long-term IDR.
Speaker #2: We believe this affirmation, particularly under the current market conditions, further reflects the resilience of our diversified business model and the strength of our financial position.
Speaker #2: With that, I would now like to hand over to my colleague Rajiv, who has recently joined the GFH family. Rajiv will take you through the key financial results and provide further details on our performance during the first half of the year.
Speaker #2: After which, I'll take you through the performance details and latest updates across business lines. Over to you, Rajiv.
Speaker #3: Thank you, Iman, and good afternoon, everyone. It is a pleasure to be joining GFH, and I'm delighted to be with you today for my first earnings call with the group.
Speaker #3: I'll take you through the key financial highlights for the first half of the year, including the key drivers behind our results. We are pleased to report another period of strong and positive performance, with GFH continuing to deliver a consistent and upward profit trajectory.
Speaker #3: Net profit attributable to shareholders reached approximately $76.2 million, representing a 13.3% year-on-year increase. Consolidated net profit for the six months stood at approximately $76.6 million, up 9.8% year-on-year.
Speaker #3: This performance was supported by continued growth in total income, which increased by 4.4% year-on-year, reflecting solid contributions across our business lines. In particular, Wealth and Investment Management delivered a strong 48.4% year-on-year increase in income, contributing around 42.9% and reaching $132.8 million in H1 26, driven by higher management and performance fees.
Speaker #3: This reflects the continued growth of the platform and the strength of our underlying asset management activities, while remaining firmly aligned with our business model and strategic focus on growing recurring and performance-based fee income.
Speaker #3: Now, turning to our credit and financing business, we delivered a strong performance during the period, with total income increasing by around 15.1% and contributing approximately 22.6% of the total income.
Speaker #3: The performance was primarily driven by higher financing income, reflecting the continued growth of our financing activities, with underwriting income providing additional support. Treasury and proprietary investments remained a significant contributor, accounting for approximately 34.5% of total income, supported by solid contributions from fixed income, asset liability management, and trading activities.
Speaker #3: Performance in proprietary investments was further supported by gains realized from selected portfolio exits during the period, reflecting our disciplined approach to actively managing and optimizing the investment portfolio.
Speaker #3: At the same time, total expenses increased by a modest 2.2% year-on-year, broadly in line with the growth of the bank's business. Beyond the profit and loss, our balance sheet remains a key source of strength.
Speaker #3: We continue to maintain significant liquidity, a diversified asset base, and a strong capital position, giving us both resilience and the capacity to selectively deploy capital into attractive opportunities.
Speaker #3: The balance sheet remains strong and resilient, with total assets reaching $12.4 billion at H1 2026, broadly stable versus end 2025, reflecting disciplined balance sheet management.
Speaker #3: Assets and AUM reached $23.9 billion, up 3% from December 25, keeping the bank on track to achieve its AUM target and reinforcing the scale, diversification, and continued growth of our investment management platform.
Speaker #3: Liquidity remains a key strength, with $5.4 billion of cash and treasury portfolio, equivalent to approximately 43.4% of total assets. The asset base continued to be actively rebalanced, with cash and bank balances increased by 19.5% versus December '25, financing contracts increasing to $22.6 billion, while proprietary assets grew to $3.3 billion.
Speaker #3: Supporting a diversified balance sheet across financing, investment, and treasury activities. Shareholders’ equity remained resilient at approximately $1.01 billion, broadly in line with year-end levels, providing a solid capital base to support the Group’s continued growth.
Speaker #3: Return on equity reached a record 15% in H1 26, increasing by 3.3 points from December 25, reflecting stronger profitability and improved efficiency in deploying shareholders' capital.
Speaker #3: This represents a meaningful improvement in the bank's ability to generate returns from its capital base. Overall, the balance sheet continues to provide a strong foundation for growth, combining meaningful liquidity, a diversified asset mix, and a stable shareholder capital base.
Speaker #3: While maintaining flexibility to deploy capital selectively across the bank's core businesses. With robust capitalization, liquidity, and funding levels, we remain well-capitalized. Our capital adequacy ratio stands at 14.04%, Tier One capital ratio at 13.34%, liquidity coverage ratio at 139%, and net stable funding ratio at 102%.
Speaker #3: All our regulatory ratios are above the required thresholds. These are the key financial highlights for the period. I will now hand over to Iman, who will walk us through the key highlights across our three core business lines.
Speaker #2: Thank you, Reggie, for covering the financial details. I'll start with wealth and investment management. This segment remained a key growth engine for GFH, delivering income of $132.8 million this half, up 48.4% year-on-year, with continued growth in management and performance fees—up 63.1% and 93.1% year-on-year, respectively.
Speaker #2: Supported by the resilience of our investment platforms, recurring income, and sustained demand for high-quality, income-generating assets, GFH Partners, our Dubai-based global investment platform, continued to make strong progress during this period.
Speaker #2: The platform remains diversified across the GCC, MENA, United States, Europe, and the United Kingdom, with investments in resilient and essential sectors including logistics, student and multifamily housing, and healthcare.
Speaker #2: In the GCC, we continued to scale our logistics and industrial real estate platform, particularly across Saudi Arabia and the UAE. In the first half, we launched the KSA Logistics Fund, the fifth fund in our GCC logistics series, and continued to build out the MAMAR logistics platform.
Speaker #2: We also expanded our Saudi logistics footprint through a strategic partnership with Mountain Real Estate, further strengthening our presence across key markets in the Kingdom.
Speaker #2: Importantly, we are seeing strong demand from partners and investors for our logistics strategy, which is creating opportunities to scale the platform further. In line with this demand, GFH signed an MOU with OCTO Management to develop a $300 million logistics and industrial real estate platform across Saudi Arabia and the UAE.
Speaker #2: This is a strong validation of our strategy and the growing institutional appetite for high-quality logistics and industrial assets in the region. The current regional environment has further reinforced the importance of resilient logistics and supply chain infrastructure, supporting both the long-term investment thesis and institutional demand for these assets.
Speaker #2: In the United States, we remain highly confident in the long-term fundamentals of the market and continue to expand our portfolio in this market. The US remains the anchor of the GFH Partners platform and represents the majority of its AUM, with a strong focus on income-generating logistics, living, and healthcare assets.
Speaker #2: We also continue to bring new investment opportunities in these sectors to our investors during the period. Importantly, despite the more challenging exit environment during this period, we remain focused on actively managing the portfolio and crystallizing value for our investors.
Speaker #2: During the period, GFH Partners agreed to the sale of its majority stake in Student Quarter to the Sion Group, demonstrating our ability to execute selective exits and realize value even under challenging market conditions.
Speaker #2: Our private equity portfolio also continued to contribute positively to recurring asset management fees. The portfolio has remained relatively resilient, reflecting its exposure to defensive and mission-critical businesses, with limited impact from the current market environment to date.
Speaker #2: We believe this combination of diversification, recurring management and performance income, active portfolio management, and selective deployment positions wealth and investment management to continue contributing meaningfully to GFH's growth trajectory.
Speaker #2: Turning now to credit and financing, the credit and financing segment delivered double-digit growth, with income reaching $69.9 million in H1 2026, up 15.1% year-on-year.
Speaker #2: Supported by the continued expansion of our financing activity, finance income increased 45.3% to $76.6 million, with gross financing contracts reaching approximately $22.6 billion compared with $2.5 billion as at 2025.
Speaker #2: Underwriting income also remained a meaningful contributor at $27.1 million. Khaliji Bank continued to strengthen its underlying performance, with net profit attributable to shareholders before impairment allowances increasing 4.6% to $18.9 million, compared with $18.1 million in H1 2025.
Speaker #2: Total income grew 14.2% to $84.7 million, supported by the Venus Sheet expansion and improved funding efficiency, as the cost of funding declined. The increase in provision at a group level was largely attributable to Khaliji Bank, which recorded $17.9 million in provisions and impairment during the period. This approach is part of our prudent risk management, to continue to maintain a strong focus on asset quality and protect the quality of the balance sheet.
Speaker #2: Khaliji Bank has also appointed Mr. Razin Marwaddi as Chief Executive Officer. Razin brings extensive experience across financial services and a strong understanding of the group, having previously served as Chief Wealth Management Officer at GFH. We believe his experience and knowledge of the financial services landscape will be valuable as Khaliji Bank continues its repositioning and focuses on strengthening its platform and delivering its next phase of growth.
Speaker #2: Looking ahead, our focus in this segment remains on disciplined growth and continued improvement in funding and operating efficiency, while positioning Khaliji Bank and a broader credit and financing platform as increasingly important contributors to recurring bank earnings.
Speaker #2: A key strength of the balance sheet continues to be our treasury portfolio, which stood at $5.1 billion at H1 2026, representing around 41% of total assets.
Speaker #2: The portfolio remains predominantly invested in high-quality sukuk, including approximately $3.9 billion in quoted sukuk, providing a strong combination of liquidity, capital preservation, and recurring income.
Speaker #2: This is complemented by approximately USD, with financial institutions alongside diversified investments in funds. Cash and bank balances also increased by 19.5% year-on-year, further strengthening our liquidity position and providing the flexibility to support growth and capitalize on opportunities as they arise.
Speaker #2: With a proprietary investment, the year-on-year performance reflects a normalization from the particularly strong gain recorded in the prior year. During H1, we continued to actively manage and rebalance the portfolio, including realizing gains from selected asset disposals.
Speaker #2: At the same time, we continue to selectively pursue high-quality strategic investment opportunities, including participating as an anchor investor in the dual IPO of Pershing Square and Pershing Square USA on the New York Stock Exchange, as well as securing strategic exposure to SpaceX through a structured transaction.
Speaker #2: Overall, our focus remains on maintaining a high-quality and liquid treasury portfolio while selectively optimizing the mix between liquidity, recurring income, and attractive investment opportunities to support sustainable earnings.
Speaker #2: Turning to our share price performance, the stock, like many markets and financial stocks across the region, was impacted by the broader geopolitical environment and the resulting market volatility.
Speaker #2: Importantly, however, the share price has held up well and remains 22.9% above its Q1 closing level and 68.5% higher year-on-year. This performance is also supported by the continued improvement in our underlying earnings.
Speaker #2: H1 2026 earnings per share increased by 14.5% to $2.21 compared with $1.93 in H1 2025, reflecting the continued growth in profitability. Looking at the broader market, GFH has also significantly outperformed the DFM Index over the past 12 months by approximately 52.5%, demonstrating the market's continued recognition of the group's earnings growth and underlying fundamentals despite wider market volatility.
Speaker #2: On ESG and community impact, we continue to focus on initiatives across health, well-being, employee development, education, entrepreneurship, and community welfare. Key highlights include the GFH Accelerate Night Run attracting nearly 1,000 participants; continued employee development through our Mindset Worker Program; supporting 91 student-led projects through Startup Bahrain and the University of Bahrain; partnering with Alia National School to develop a new campus, GFH Alia National School; and initiatives through the GFH Foundation.
Speaker #2: And through the GFH Foundation, we have furnished more than 20 homes for widows, orphans, and underprivileged families. All in all, these initiatives reflect our continued commitment to creating tangible and measurable impact across the communities we serve in GFH. We will now move to the Q&A session and open the floor for your questions.
Speaker #2: Please use the Q&A feature through the chat panel to submit your question, and we will address as many as possible during the session.
Speaker #1: Actually, apologies. Regarding the CF company, we have given an offer and we anticipate to close it very soon. I would like to highlight that this acquisition is not for the GFH book; it's for one of our asset management entities. Inshallah, this is part of our model where we acquire companies that we see have good value for growth, and this will be part of our CF Growth Fund strategy.
Ahmed El-Shazly: Good afternoon, everyone, and welcome to GFH's Q2 2026 results call. This is Ahmed El-Shazly from EFG Hermes, and it's a pleasure to have with us on the call today, from management, Hisham Alrayes, Group CEO and Board Member; Mr. Rajeev Gogia, Group CFO; and Ms. Eman Mohamed, Executive Director of Strategy and Shareholder Relations. I will now hand the call over to Ms. Eman to start with the presentation.
Ahmed El-Shazly: Good afternoon, everyone, and welcome to GFH's Q2 2026 results call. This is Ahmed El-Shazly from EFG Hermes, and it's a pleasure to have with us on the call today from management, Hisham Alrayes, Group CEO and board member, Mr. Rajeev Gogia, Group CFO, and Ms. Eman Mohamed, Executive Director of Strategy and Shareholder Relations. I will now hand the call over to Ms. Eman to start with the presentation.
Eman Mohamed: Good afternoon, everyone, and thank you for joining the GFH Bank earnings call for H1 2026. We will take you through the key highlights, financial performance, and business updates for the period, following which we will open the floor for questions. The Q&A session will be addressed directly by our CEO. You are welcome to submit your questions at any time during the presentation through the chat function. I am pleased to share that GFH delivered a resilient H1 performance, reflecting the strength of our diversified business model, disciplined execution, and the effectiveness of our strategy. H1 was marked by a challenging regional environment. At the same time, the performance we have delivered this half, under these circumstances, validates our strategic direction and the strategy we have pursued over recent years.
Eman Mohamed: Good afternoon, everyone, and thank you for joining GFH Bank earnings call for H1 2026. We will take you through the key highlights, financial performance, and business updates for the period, following which we will open the floor for questions. The Q&A session will be addressed directly by our CEO. You are welcome to submit your questions at any time during the presentation through the chat function. I am pleased to share that GFH delivered a resilient H1 performance, reflecting the strength of our diversified business model, disciplined execution, and the effectiveness of our strategy. H1 was marked by a challenging regional environment. At the same time, the performance we have delivered this half under these circumstances validates our strategic direction and the strategy we have pursued over recent years.
Speaker #1: Which does not focus only on Bahrain, but also on similar opportunities in hospitality and lifestyle across the Gulf. So, I think that's most of the questions from Brother Fadhil.
Speaker #1: I will move to the next questions from other participants. There are more technical questions. Regarding the UN ratios, I will leave this to Brother Rochelle Sharma.
Eman Mohamed: Our diversification across geographies, business lines, and income streams has provided us with the stability and flexibility to absorb these external pressures, while also positioning us to benefit from the shift in the market. In fact, the geopolitical situation has created opportunities in certain areas, and our agile strategy has enabled us to respond quickly and selectively to capture these opportunities and continue creating value for our shareholders. Further positive validation of our performance and financial resilience came from the credit rating agencies. Fitch Ratings affirmed GFH's ratings at B and maintained a stable outlook on our long-term IDR. We believe this affirmation, particularly under the current market conditions, further reflects the resilience of our diversified business model and the strength of our financial position. With that, I would like now to hand over to my colleague, Rajeev, who has recently joined the GFH family.
Eman Mohamed: Our diversification across geographies, business lines, and income streams has provided us with the stability and flexibility to absorb these external pressures, while also positioning us to benefit from the shift in the market. In fact, the geopolitical situation has created opportunities in certain areas, and our agile strategy has enabled us to respond quickly and selectively to capture these opportunities and continue creating value for our shareholders. Further positive validation of our performance and financial resilience came from the credit rating agencies. Fitch Ratings affirmed GFH ratings at B and maintained a stable outlook on our long-term IDR. We believe this affirmation, particularly under the current market conditions, further reflects the resilience of our diversified business model and the strength of our financial position. With that, I would like now to hand over to my colleague, Rajeev, who has recently joined the GFH family.
Regarding our uh, recurring fees in wealth management and Investment Management. Those are mostly feasible managing the, um, uh, our portfolios. And um, and um and the substantial part of that are mostly reclining fees and uh big part of the balance sheet that has been built to have, are from the treasury and caring from financing and credit and when it comes to well for management you have, um, I would say uh,
Uh, 50% is, uh, the underwriting and the upfront fees. And then the remaining, I would say, 50 to 60% is coming from, uh, our management fees of the portfolios.
Eman Mohamed: Rajeev will take you through the key financial results and provide further details on our performance during H1 of the year. After that, I will take you through the performance details and latest updates across our business lines. Over to you, Rajeev.
Eman Mohamed: Rajeev will take you through the key financial results and provide further details on our performance during H1 of the year. After which, I will take you through the performance details and latest updates across business lines. Over to you, Rajeev.
Rajeev Gogia: Thank you, Eman, and good afternoon, everyone. It is a pleasure to be joining GFH, and I am delighted to be with you today for my first earnings call with the group. I will take you through the key financial highlights for the first half of the year, including the key drivers behind our results. We are pleased to report another period of strong and positive performance, with GFH continuing to deliver a consistent and upward profit trajectory. Net profit attributable to shareholders reached approximately $76.2 million, representing a 13.3% year-on-year increase. Consolidated net profit for the six months stood at approximately $76.6 million, up 9.8% year-on-year. This performance was supported by continued growth in total income, which increased by 4.4% year-on-year, reflecting solid contributions across our business lines.
Rajeev Gogia: Thank you, Eman, and good afternoon, everyone. It is a pleasure to be joining GFH, and I am delighted to be with you today for my first earnings call with the group. I will take you through the key financial highlights for the H1 of the year, including the key drivers behind our results. We are pleased to report another period of strong and positive performance, with GFH continuing to deliver a consistent and upward profit trajectory. Net profit attributable to shareholders reached approximately $76.2 million, representing a 13.3% year-on-year increase. Consolidated net profit for the 6 months stood at approximately $76.6 million, up 9.8% year-on-year. This performance was supported by continued growth in total income, which increased by 4.4% year-on-year, reflecting solid contributions across our business lines.
So just to give, uh some, uh, some comfort there is, um, gfit is not reliant on a placement of tests and fund. Despite that during every year GF is replaces 8001 billion of, uh, a new, um, new funds and to the market, which they get rolled over, uh, as well. And this generates, uh, substantial fees for the group. However, um, I would like to highlight that the, um, the maturities and the exits, uh, for for the funds, mostly gets rolled into new new funds, which makes it easy to, um, to, to achieve the size of the placements. And, uh, hence, we see, um, those, uh, fees are recurring in nature, as well.
um,
we will move to, um,
The next question.
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from from, um,
Um, I think a lot of the technical questions I will leave to Rajiv to respond to.
Then.
Rajeev Gogia: In particular, Wealth and Investment Management delivered a strong 48.4% year-on-year increase in income, contributing around 42.9% and reaching $132.8 million in H1 26, driven by higher management and performance fees. This reflects the continued growth of the platform and the strength of our underlying asset management activities, while remaining firmly aligned with our business model and strategic focus on growing recurring and performance-based fee income. Now, turning to our Credit and Financing business line, the segment also delivered a strong performance during the period, with total income increasing by around 15.1% and contributing approximately 22.6% of the total income. The performance was primarily driven by higher financing income, reflecting the continued growth of our financing activities, with underwriting income providing additional support. Treasury and Proprietary Investments remained a significant contributor, accounting for approximately 34.5% of total income, supported by solid contributions from fixed income, asset liability management, and trading activities.
Rajeev Gogia: In particular, Wealth and Investment Management delivered a strong 48.4% year-on-year increase in income and contributing around 42.9%, reaching $132.8 million in H126, driven by higher management and performance fees. This reflects the continued growth of the platform and the strength of our underlying asset management activities while remaining firmly aligned with our business model and strategic focus on growing recurring and performance-based fee income. Now, turning to our Credit and Financing business line, the segment also delivered a strong performance during the period, with total income increasing by around 15.1% and contributing approximately 22.6% of the total income. The performance was primarily driven by higher financing income, reflecting the continued growth of our financing activities, with underwriting income providing additional support. Treasury and Proprietary Investments remained a significant contributor, accounting for approximately 34.5% of total income, supported by solid contributions from fixed income, asset liability management, and trading activities.
Um, how to plan to list any company this year? Um it's um we are um cautious about listing. We have considered multiple listing, however data trading multiple, today is has explained by umm Ayman is at a premium from market. So do you if it I think, um,
Um, shareholding, uh, and uh, uh, Market making strategies working well to keep G fetch trading at a premium in the market, despite the, uh, what's happening. Um, regionally and we compared our Master posts also to, um,
Um, uh, opportunity to being, uh, double listed in other markets. Um, instead of we investing our time and to other markets, we feel that, um, inviting and uh, running Road shows to, to get more participants to trade and our for markets that we are listed in, will create a better value for the shareholders. So we focus on growth distribution and explaining our stories to International and Regional funds uh to to uh to estimated the interest and value.
Um,
I would like to move also to
Rajeev Gogia: Performance in proprietary investments was further supported by gains realized from selected portfolio exits during the period, reflecting our disciplined approach to actively managing and optimizing the investment portfolio. At the same time, total expenses increased by a modest 2.2% year-on-year, broadly in line with the growth of the bank's business. Beyond the profit and loss, our balance sheet remains a key source of strength. We continue to maintain significant liquidity, a diversified asset base, and a strong capital position, giving us both resilience and the capacity to selectively deploy capital into attractive opportunities. The balance sheet remains strong and resilient, with total assets reaching $12.4 billion at H1 '26, broadly stable versus end '25, reflecting disciplined balance sheet management.
Rajeev Gogia: Performance in proprietary investments was further supported by gains realized from selected portfolio exits during the period, reflecting our disciplined approach to actively managing and optimizing the investment portfolio. At the same time, total expenses increased by a modest 2.2% year-on-year, broadly in line with the growth of the bank's business. Beyond the profit and loss, our balance sheet remains a key source of strength. We continue to maintain significant liquidity, a diversified asset base, and a strong capital position, giving us both resilience and the capacity to selectively deploy capital into attractive opportunities. Balance sheet remains strong and resilient, with total assets reaching $12.4 billion at H126, broadly stable versus end '25, reflecting disciplined balance sheet management.
H, what? See if again, I have explained from some of our follow. So those are the questions. So maybe now, Raj, if you could, uh, uh, respond to, um...
Send and yeah.
Yeah, and answer my other questions. Yeah, yes.
I think this is 1 of the question. So Mayas has is on the stage, uh, the is regarding the increase in the stage 3 zones, uh, and talking about the coverage ratio on, on that at lower 25%, there has, I think there has been a uh, some increase in the stage 3 loans in terms. That is the reason. If you look at the pro, uh the impairment charge has gone up from our banking subsidiary. But the in terms
Rajeev Gogia: Assets and AUM reached $23.9 billion, up 3% from December ’25, keeping the bank on track to achieve its AUM target and reinforcing the scale, diversification, and continued growth of our investment management platform. Liquidity remains a key strength, with $5.4 billion of cash and treasury portfolio, equivalent to approximately 43.4% of total assets. The asset base continued to be actively rebalanced, with cash and bank balances increased by 19.5% versus December ’25. Financing contracts increased to $2.6 billion, while proprietary assets grew to $3.3 billion, supporting a diversified balance sheet across financing, investment, and treasury activities. Shareholders’ equity remains resilient at approximately $1.01 billion, broadly in line with year-end levels, providing a solid capital base to support the group’s continued growth. Return on equity reached a record 15% in H1 26, increasing by 3.3 points from December ’25, reflecting stronger profitability and improved efficiency in deploying shareholders’ capital.
Rajeev Gogia: Assets and AUM reached $23.9 billion, up 3% from December '25, keeping the bank on track to achieve its AUM target and reinforcing the scale, diversification, and continued growth of our investment management platform. Liquidity remains a key strength, with $5.4 billion of cash and treasury portfolio equivalent to approximately 43.4% of total assets. The asset base continued to be actively rebalanced, with cash and bank balances increased by 19.5% versus December '25. Financing contracts increasing to $2.6 billion, while proprietary assets grew to $3.3 billion, supporting a diversified balance sheet across financing, investment, and treasury activities. Shareholders' equity remains resilient at approximately $1.01 billion, broadly in line with year-end levels, providing a solid capital base to support the group's continued growth. Return on equity reached a record 15% in H126, increasing by 3.3 points from December '25, reflecting stronger profitability and improved efficiency in deploying shareholders' capital.
The provision of ratio is very important to see that. We need to look at the provision coverage ratio along with the collaterals, which we have. If we take the collectors and the provision, which we have already taken, we are over 100% as far as the stage 3, uh, exposures are concerned. So from that perspective, we are duly covered. Uh, we have very good collectors against all these uh financing which is there. And from that perspective it's we are we are comfortable.
Now, about those, I know that question, uh, about the, um,
Uh, the capitalization. Uh, we feel that we are, um, um, uh, where we are well within the, um, uh, operational ratios.
Uh, and capitalization. Um, so for further, um, disposal of Treasury shares and some of the anticipated exits that we see coming shortly, this will further enhance our capitalization. Uh, despite that, we are looking into—uh, we have previous approval on 81,
Um, uh, and we are currently, um, in discussion with one of the financial institutions that they will, uh, undertake a substantial, uh, part of that. And this should further enhance the capitalization, uh, of the bank.
Um, um, about Jesus—there are other questions also, many unforeseen.
If we responded to the questions, which are there.
Rajeev Gogia: This represents a meaningful improvement in the bank's ability to generate returns from its capital base. Overall, the balance sheet continues to provide a strong foundation for growth, combining meaningful liquidity, a diversified asset mix, and a stable shareholder capital base, while maintaining flexibility to deploy capital selectively across the bank's core businesses. Robust capitalization, liquidity, and funding levels—we remain well capitalized. Our capital adequacy ratio is at 14.04%, Tier 1 capital ratio at 13.34%, liquidity coverage ratio at 139%, and net stable funding ratio at 102%. All our regulatory ratios are above the required thresholds. These are the key financial highlights for the period. I will now hand over to Eman to walk us through the key highlights across our three core business lines.
Rajeev Gogia: This represents a meaningful improvement in the bank's ability to generate returns from its capital base. Overall, the balance sheet continues to provide a strong foundation for growth, combining meaningful liquidity, a diversified asset mix, and a stable shareholder capital base while maintaining flexibility to deploy capital selectively across the bank's core businesses. Robust capitalization, liquidity, and funding levels. We remain well capitalized. Our capital adequacy ratio at 14.04%, Tier 1 capital ratio at 13.34%, liquidity coverage ratio at 139%, and net stable funding ratio at 102%. All our regulatory ratios are above the regulatory thresholds. These are the key financial highlights for the period. I will now hand over to Eman to walk us through the key highlights across our three core business lines.
Yeah, I think um, with that um, veggies and kapan, um, we have concluded. Um I think with that we have concluded the Q&A session um, and um, we would like to thank everyone who joined us today. I would like to leave the final remarks to the group CEO, um, over to you Muhammad.
Thank you, everyone. And I would like to thank everybody. I think that, um...
Eman Mohamed: Thank you, Mr. Rajeev Gogia, for covering the financial details. I will start with wealth and investment management. This segment remained a key growth engine for GFH, delivering income of $132.8 million this H1, up 48.4% year-on-year, with continued growth in management and performance fees, up 63.1% and 93.1% year-on-year, respectively. This was supported by the resilience of our investment platforms, recurring income, and sustained demand for high-quality, income-generating assets. GFH Partners, our Dubai-based global investment platform, continued to make strong progress during this period. The platform remains diversified across the GCC, MENA, United States, Europe, and the United Kingdom, with investments in resilient and essential sectors, including logistics, student and multi-family housing, and healthcare. In the GCC, we continued to scale our logistics and industrial real estate platform, particularly across Saudi Arabia and the UAE.
Eman Mohamed: Thank you, Mr. Rajeev Gogia, for covering the financial details. I will start with wealth and investment management. This segment remained a key growth engine for GFH, delivering income of USD 132.8 million this H1, up 48.4% year-on-year, with continued growth in management and performance fees up 63.1% and 93.1% year-on-year respectively. Supported by the resilience of our investment platforms, recurring income, and sustained demand for high-quality income-generating assets. GFH Partners, our Dubai-based global investment platform, continued to make stronger progress during this period. The platform remains diversified across the GCC, MENA, United States, Europe, and the United Kingdom, with investments in resilient and essential sectors including logistics, student and multi-family housing, and healthcare. In the GCC, we continued to scale our logistics and industrial real estate platform, particularly across Saudi Arabia and the UAE.
Um, um, despite the changes in the market go from in very resilient in terms of the financial systems, and we see, um, good value, uh, for investment Banks. And as the managers to capture on the gulf, which we are focusing on, um, we are releasing number of very interesting deals, uh, to the market and we see the appetite is quite strong and with the gfh transforming into, hopefully a full-fledged bank, at 12, it's opening up a lot of opportunities and the wealth management and uh,
Looking into it, this should drive substantial growth, inshallah, to the bank and reflect to the shareholders as well.
Thank you, everybody, for joining. If there are no further questions, we'll conclude the meeting today.
Thank you, and thank you everyone. We look forward to updating you on the progress in the months ahead. Have a very good day.
Thank you.
Thank you.
Eman Mohamed: In H1, we launched the KSA Logistics Fund, the fifth fund in our GCC logistics series, and continued to build out the Mamar Logistics platform. We also expanded our Saudi logistics footprint through a strategic partnership with Mulkan Real Estate, further strengthening our presence across key markets in the Kingdom. Importantly, we are seeing strong demand from partners and investors for our logistics strategy, which is creating opportunities to scale the platform further. In line with this demand, GFH signed an MoU with Octal Management to develop a $300 million logistics and industrial real estate platform across Saudi Arabia and the UAE. This is a strong validation of our strategy and the growing institutional appetite for high-quality logistics and industrial assets in the region.
Eman Mohamed: In the H1, we launched the KSA Logistics Fund, the fifth fund in our GCC logistics series, and continued to build out the Mamar Logistics platform. We also expanded our Saudi logistics footprint through a strategic partnership with Mulkan Real Estate, further strengthening our presence across key markets in the kingdom. Importantly, we are seeing strong demand from partners and investors for our logistics strategy, which is creating opportunities to scale the platform further. In line with this demand, GFH signed an MoU with Octal Management to develop USD 300 million logistics and industrial real estate platform across Saudi Arabia and the UAE. This is a strong validation of our strategy and the growing institutional appetite for high-quality logistics and industrial assets in the region.
Eman Mohamed: The current regional environment has further reinforced the importance of resilient logistics and supply chain infrastructure, supporting both the long-term investment thesis and institutional demand for these assets. In the United States, we remain highly confident in the long-term fundamentals of the market and continue to expand our portfolio in this market. The US remains the anchor of the GFH Partners platform and represents the majority of its AUM, with a strong focus on income-generating logistics, living, and healthcare assets. We also continue to bring in new investment opportunities in these sectors to our investors during the period. Importantly, despite the more challenging exit environment during this period, we remain focused on actively managing the portfolio and crystallizing value for our investors.
Eman Mohamed: The current regional environment has further reinforced the importance of resilient logistics and supply chain infrastructure, supporting both the long-term investment thesis and institutional demand for these assets. In the United States, we remain highly confident in the long-term fundamentals of the market and continue to expand our portfolio in this market. The US remains the anchor of GFH Partners platform and represents the majority of its AUM, with a strong focus on income-generating logistics, living, and healthcare assets. We also continue to bring in new investment opportunities in these sectors to our investors during the period. Importantly, despite the more challenging exit environment during this period, we remain focused on actively managing portfolio and crystallizing value for our investors.
Eman Mohamed: During the period, GFH Partners agreed the sale of its majority stake in Student Quarters to the Scion Group, demonstrating our ability to execute selective exits and realize value even under challenging market conditions. Our private equity portfolio also continued to contribute positively to recurring asset management fees. The portfolio has remained relatively resilient, reflecting its exposure to defensive and mission-critical businesses with limited impact from the current market environment to date. We believe this combination of diversification, recurring management and performance income, active portfolio management, and selective deployment positions wealth and investment management to continue contributing meaningfully to GFH's growth trajectory. Turning now to credit and financing. The credit and financing segment delivered double-digit growth, with income reaching $69.9 million in H1 2026, up 15.1% year-on-year, supported by the continued expansion of our financing activity.
Eman Mohamed: During the period, GFH Partners agreed the sale of its majority stake in Student Quarters to the Scion Group, demonstrating our ability to execute selective exits and realize value even under challenging market conditions. Our private equity portfolio also continued to contribute positively to recurring assets management fee. The portfolio has remained relatively resilient, reflecting its exposure to defensive and mission-critical businesses with limited impact from the current market environment to date. We believe this combination of diversification, recurring management and performance income, active portfolio management, and selective deployment positions wealth and investment management will to continue contributing meaningfully to GFH's growth trajectory. Turning now to credit and financing. Credit and financing segment delivered double-digit growth, with income reaching $69.9 million in H1 2026, up 15.1% year-on-year, supported by the continued expansion of our financing activity.
Eman Mohamed: Finance income increased 45.3% to $76.6 million, with the gross financing contracts reaching approximately $22.6 billion, compared with $2.5 billion at year-end 2025. Underwriting income also remained a meaningful contributing at $27.1 million. Khaleeji Bank continued to strengthen its underlying performance with net profit attributable to shareholders before impairment allowances increased 4.6% to $18.9 million, compared with $18.1 million in H1 2025. Total income grew 14.2% to $84.7 million, supported by balance sheet expansion and the improved funding efficiency as the cost of funding declined. The increase in provision at a group level was largely attributable to Khaleeji Bank, which recorded $17.9 million in provisions and impairment during the period. This approach is part of our prudent risk management approach and to continue to maintain strong focus on asset quality and protecting the quality of the balance sheet.
Eman Mohamed: Finance income increased 45.3% to $76.6 million, with the gross financing contracts reaching approximately $22.6 billion, compared with $2.5 billion at year-end 2025. Underwriting income also remained a meaningful contributing at $27.1 million. Khaleeji Bank continued to strengthen its underlying performance with net profit attributable to shareholders before impairment allowances increased 4.6% to $18.9 million, compared with $18.1 million in H1 2025. Total income grew 14.2% to $84.7 million, supported by balance sheet expansion and the improved funding efficiency as the cost of funding declined. The increase in provision at a group level was largely attributable to Khaleeji Bank, which recorded $17.9 million in provisions and impairment during the period. This approach is part of our prudent risk management approach and to continue to maintain strong focus on asset quality and protecting the quality of the balance sheet.
Eman Mohamed: Khaleeji Bank has also appointed Razi Almerbati as Chief Executive Officer. Razi brings extensive experience across financial services and a strong understanding of the group, having previously served as Chief Wealth Management Officer at GFH. We believe his experience and knowledge of the financial services landscape will be valuable as Khaleeji Bank continues its repositioning and focuses on strengthening its platform and delivering its next phase of growth. Looking ahead, our focus in this segment remains on disciplined growth and continued improvement in funding and operating efficiency, while positioning Khaleeji Bank and a broader credit and financing platform as increasingly important contributors to recurring bank earnings. A key strength of the balance sheet continues to be our treasury portfolio, which stood at $5.1 billion at H1 2026, representing around 41% of total assets.
Eman Mohamed: Khaleeji Bank has also appointed Razi Almerbati as Chief Executive Officer. Razi brings extensive experience across financial services and strong understanding of the group, having previously served as Chief Wealth Management Officer at GFH. We believe his experience and knowledge of the financial services landscape will be valuable as Khaleeji Bank continues to repositioning and focuses on strengthening its platform and delivering its next phase of growth. Looking ahead, our focus in this segment remains on disciplined growth and continued improvement in funding and operating efficiency. While positioning Khaleeji Bank and a broader credit and financing platform as increasingly important contributor to recurring bank earnings. A key strength of the balance sheet continues to be our treasury portfolio, which stood at $5.1 billion at H1 2026, representing around 41% of total assets.
Eman Mohamed: The portfolio remains predominantly invested in high-quality Sukuk, including approximately $3.9 billion in quoted Sukuk, providing a strong combination of liquidity, capital preservation, and recurring income. This is complemented by approximately $802 million placed with financial institutions, alongside diversified investment in funds. Cash and bank balances also increased by 19.5% year-on-year, further strengthening our liquidity position and providing the flexibility to support growth and capitalize on opportunities as they arise. With the proprietary investment, the year-on-year performance reflects a normalization from the particularly strong gain recorded in the prior year. During H1, we continued to actively manage and rebalance the portfolio, including realizing gains from selected asset disposals. At the same time, we continue to selectively pursue high-quality strategic investment opportunities, including participating as an anchor investor in the dual IPO of Pershing Square and Pershing Square USA on the New York Stock Exchange.
Eman Mohamed: The portfolio remains predominantly invested in high-quality Sukuk, including approximately $3.9 billion in quoted Sukuk, providing a strong combination of liquidity, capital preservation, and recurring income. This is complemented by approximately $802 million in placement with financial institutions alongside diversified investment in funds. Cash and bank balances also increased by 19.5% year-on-year, further strengthening our liquidity position and providing the flexibility to support growth and capitalize on opportunities as they arise. With the proprietary investment, the year-on-year performance reflects a normalization from the particularly strong gain recorded in the prior year. During H1, we continued to actively manage and rebalance the portfolio, including realizing gains from selected asset disposal. At the same time, we continue to selectively pursue high-quality strategic investment opportunities, including participating as anchor investor in the dual IPO of Pershing Square and Pershing Square USA on the New York Stock Exchange.
Eman Mohamed: As well as securing strategic exposure to SpaceX through a structured transaction. Overall, our focus remains on maintaining a high-quality and liquid treasury portfolio while selectively optimizing the mix between liquidity, recurring income, and attractive investment opportunities to support sustainable earnings. Turning to our share price performance, the stock, like many markets and financial stocks across the region, was impacted by the broader geopolitical environment and the resulting market volatility. Importantly, however, the share price has held up well and remains 22.9% above its Q1 closing level and 68.5% higher year-on-year. This performance is also supported by the continued improvement in our underlying earnings. H1 2026 earnings per share increased by 14.5% to $2.21, compared with $1.93 in H1 2025, reflecting the continued growth in profitability.
Eman Mohamed: As well as securing strategic exposure to SpaceX through a structured transaction. Overall, our focus remains on maintaining a high-quality and liquid treasury portfolio while selectively optimizing the mix between liquidity, recurring income, and attractive investment opportunities to support sustainable earnings. Turning to our share price performance, the stock, like many markets and financial stocks across the region, was impacted by the broader geopolitical environment and the resulting market volatility. Importantly, however, the share price has held up well and remains 22.9% above its Q1 closing level and 68.5% higher year-on-year. This performance is also supported by the continued improvement in our underlying earnings. H1 2026 earnings per share increased by 14.5% to $2.21, compared with $1.93 in H1 2025, reflecting the continued growth in profitability.
Eman Mohamed: Looking at the broader market, GFH has also significantly outperformed the DFM index over the past 12 months by approximately 52.5%, demonstrating the market's continued recognition of the group's earnings growth and underlying fundamentals despite the wider market volatility. On ESG and community impact, we continue to focus on initiatives across health, well-being, employee development, education, entrepreneurship, and community welfare. Key highlights including the GFH Accelerate 9 trend attracting nearly 1,000 participants, continued employee development through our Minds at Work program, supporting 91 student-led projects through the StartUp Bahrain and the University of Bahrain, partnering with Alia National School to develop a new campus, GFH Alia National School, and through the GFH Foundation. And through the GFH Foundation, we have furnished more than 20 homes for widows, orphans, and underprivileged families.
Eman Mohamed: Looking at the broader market, GFH has also significantly outperformed the DFM index over the past 12 months by approximately 52.5%, demonstrating the market's continued recognition of the group's earnings growth and underlying fundamentals despite the wider market volatility. On ESG and community impact, we continue to focus on initiatives across health, well-being, employee development, education, entrepreneurship, and community welfare. Key highlights including the GFH Accelerate 9 trend attracting nearly 1,000 participants, continued employee development through our Minds at Work program, supporting 91 student-led projects through the StartUp Bahrain and the University of Bahrain, partnering with Alia National School to develop a new campus, GFH Alia National School, and through the GFH Foundation. And through the GFH Foundation, we have furnished more than 20 homes for widows, orphans, and underprivileged families.
Eman Mohamed: All in all, these initiatives reflect our continued commitment to creating tangible and measurable impact across the communities we serve at GFH. We will now move to the Q&A session and open the floor for your questions. Please use the Q&A feature through the chat panel to send in your questions, and we will address as many as possible during the session. We will give everyone a few minutes to submit their questions before we begin.
Eman Mohamed: All in all, these initiatives reflect our continued commitment to creating tangible and measurable impact across the communities we serve in GFH. We will now move to the Q&A session and open the floor for your questions. Please use the Q&A feature through the chat panel to send through your questions, and we will address as many as possible during the session. We will give everyone a few minutes to submit their questions before we begin.
