GFH Bank B.S.C. ($GFH)

A very good afternoon and a warm welcome to GFH Bank Quarter 1 performance results presentation. My name is Kapil Kothari acting CFO, and I will walk you through the key highlights of our financial performance for the first quarter of 2026. We are pleased to report that GFH continued to deliver strong financial performance despite the impact of regional developments and heightened market uncertainties during the reporting period. Our robust strategy has provided us with the stability needed to continue our growth during [ the selling ] time. The continued improvement in return on equity reinforces the strength of our diversified platform, disciplined execution and our ability to translate strategic priorities into miserable outcomes. Let me begin with a summary of our key financial highlights. GFH delivered double-digit growth in consolidated net profit for the first quarter of 2026 by 12% year-on-year to $34 million. 1.5% growth in net attributable to shareholders standing at $35 million for the first 3 months of 2026 compared to $30 million for the similar period last year. All core business segments of the bank continued to contribute meaningfully to overall revenue generation. Total income for the quarter increased by 24% year-on-year to $151 million. In line with our strategic initiatives and business growth, total expenses increased by 28% year-on-year. The bank's earnings per share this quarter have risen to [ $1.01 ] compared to [ 0.85% ] in Q1 2025 presenting a 19% year-on-year growth reinforcing the bank's profit trajectory. The bank's total asset under management have further grown by 2.1% quarter-on-quarter to $24.1 billion as of 31st March 2026. This growth was underpinned by a diversified portfolio of income-generating assets. We continue to maintain a strong liquidity position with liquid assets forming roughly 45% of our total assets. Shareholders' equity stood at $907 million. Our performance translates to a higher return on average equity. As of March 2026, with [ stents ] at 15% compared to 14% in December 2025. We continue to demonstrate our robust capital and liquidity position with a capital education ratio of 14.2%, our liquidity coverage ratio of 38% and a net stable funding ratio of all comfortably exceeding regulatory requirements and underscoring the bank's strong financial resilience and prudent risk management despite challenging reasonable conditions. We will now turn to our key highlights across 3 core businesses, along with the respective contribution to this quarter [ as ] in. The bank delivered a strong performance across its key business segments in the first quarter of 2026, supported by strength of its diversified portfolio disciplined execution and its ability to sustain growth despite the reasonable environment and its impact on market activity. We'll start with Wealth and Investment Management. Our core business line, Wealth and Investment Management contributed 55% of the total income for the quarter, demonstrating a 60% increase year-on-year to $83 million this quarter. from $52 million in first quarter of 2025. Wealth and investment management income was driven by performance fees, complemented by a recurring management fee highlighting the strength of our investment performance and disciplined execution across management managed assets. Our diverse investment portfolio [ spanning ] the U.K., Europe and the U.S. performed robustly with our strategy of targeting defensive recession-proof sectors, once again providing effective and creating value for investors and shareholders. As communicated earlier, as a part of our strategy to focus on industrial and logistics sector, we have successfully sealed a strategic partnership to develop 55,000 square meter integrated ready build factory complex in [ real ]. At the heart of our achievement, there remains a clear strategic focus on diversification, sustainable growth supported by target investments in sectors with strong underlying fundamentals. This disciplined approach has been instrumental in driving our continuous success reinforcing our commitment to create long-term value for our investors and shareholders, while maintaining a strong focus on impactful and high-quality investments. Now we'll go back to our credit and financing vertical the bank's credit financing business line contributed 26% of the bank's total income, recurring income that enforces the bank's diversified funding base. This segment achieved robust income growth of 20.3% year-on-year, reaching approximately $40 million in Q1 2026 compared to $33.2 million in Q1 2025, supported by disciplined execution and well-established financing platform. We maintained a disciplined approach to risk management and remain selective and financing opportunities. This continued to reinforce the resilience and consistency of the business line through evolving market conditions. Khaleeji provision was elevated due to micro economic conditions and prudent risk management. [ I will go to the ] next vertical, treasury and proprietary investment. The treasury and proprietary investment segment maintained a sound contribution during the quarter. Treasury performance was driven by disciplined treasury management, selective market positioning and optimizing of asset allocation. supported by a prudent risk management and this segment effectively navigates challenging market conditions while capturing attractive opportunities. Proprietary investment also contributed to deliver positive performance, executing in line with board strategic direction. Now we'll move to our share price highlights for the quarter. We would like to give some insight into bank's share price performance. During the first quarter of the year heightened geographical development in the GCC contributed to increased market uncertainties and elevated volatilities across regional and global markets. Despite a volatile market, GFS stock price ex dividend, recovered fully outperforming the DFM General Index by 100% on a year-on-year basis. Now some highlights on our ESG initiatives. Across the bank, we remain committed to advancing our ESG agenda through a range of impactful initiatives. During the quarter, we continued to strengthen our efforts across key areas, including employee development and engagement. We further enhanced internal capabilities through the bank's mine network platform, delivering sessions, focused on artificial intelligence, innovation and the future of work. These initiatives supported a culture of containers learning and reinforce our commitment to responsible and forward-looking business practices. Second one is our community and national engagement. We actively supported national sports and community initiatives through our partnership with the General Sports Authority for Bahrain Capital of Arab Sports Culture 2026 including participation in the Bahrain Sports Day and Bahrain Sports Summit. Third one is our cultural and heritage support. We continued to promote Bahrain's heritage through our partnership with his Majesty, the King Festival, reflecting the bank's ongoing commitment to initiatives that celebrate national identity and cultural legacy. I want to thank all our shareholders, partners, colleagues for their continued trust and commitment. With our robust strategy in place, and building on GFS resilience in navigating heightened macroeconomic and geographical conditions. We look ahead to the remainder of 2026 with the confidence and the continued focus on accelerating our growth diet. We remain committed to expanding our investments through a diverse and active pipeline of opportunities, while maintaining a disciplined approach to capital deployment and continue to drive resonance growth in our core businesses to deliver sustainable value for our shareholders. Looking forward to another quarter of continued progress. Now I would like to thank you all for your time this afternoon and open the floor for any questions you may have.

Thank you, everyone, for your time and multiple questions. I try and take as much as we can. First question. How comfortable is GFH liquidity position, given the current market volatility and reasonable uncertainties? See, GFH remains very comfortable from a liquidity and funding point of view. We have liquid assets of approximately 45% to the balance sheet as of date, which amounts around $5.4 billion in cash and transition portfolio. In addition, our regulatory ratios are also very strong with LCR and [ SFR ] and car all above the regulatory requirements. Liquidity remains one of the core strength of GFH. We are not only maintaining the regulatory buffers, but also preserving our flexibility to support investments, financing opportunities and shareholders' value creation in coming quarters. Next question is on AUM. So our AUM has increased to $24.1 billion. What is driving this growth? And what is the outlook for future expansion? Our AUM growth is supported by a diversified portfolio of very strong income-generating assets and continued momentum across our investment platform. Our focus is not only to grow AUM, but have quality AUM. We are targeting assets that can generate recurring management fees, performance fees and long-term value for our investors and shareholders. Our AUM is well diversified across GCC, U.K., Europe and U.S. with a continuous focus on defensive and income-generating sectors. The next question is on our outlook for the remainder of the year 2026, especially given the geopolitical and market uncertainties. I would say we remain cautiously optimistic for the rest of the year. Our priorities for the remainder of the year are very clear. We want to continue our growth in AUMs. We want to deepen our recurring income streams, maintain strong liquidity and capital buffer along with executing selective investment pipelines. While geopolitical and macroeconomic risk remains, GFH Bank, we believe, is well positioned due to its diversified platform, strong liquidity profile, as well as prudent risk management, along with capital deployment, which is very disciplined at our end. We continue to focus on sustainable growth and long-term value creation for our shareholders. Thank you. Many thanks for your time today and looking forward for joining you all in the next upcoming Q2 result presentation. Thank you all.