Portfolio Update June 2013

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Raymond Hardy
5 years ago
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1 Portfolio Update June 2013

2 Bindar Trading and Investment GMFA Stake: 69.60% Company Website: Bindar Trading and Investment ( Bindar ) is one of the largest consumer finance companies in Jordan. Bindar finances vehicles for personal and commercial use, durable assets and real estate properties. For Q1 2013, interest income improved by 20% to reach USD 1.5mn, while new financing and net interest income increased by 20% and 17%, respectively. Loan portfolio increased by 5.5% and net profit improved to USD 458k, compared to USD 246k, for the same period last year. Besides top line growth, profitability improvement (over Q1 2012) is also attributable to loss on sale of an investment in Q In line with its growth strategy, Bindar is growing by offering new products, including student loans and expanding its branch network--a new branch in East Amman has commenced operation since November The Company is in the process of setting up an Ijarah leasing company catering to the real estate Ijarah finance market. To reliably finance its growth strategy, Bindar is diversifying its financing sources to achieve better asset liability management and to enhance returns. In this context, management is considering issuing a 5 year bond with the assistance of Global Jordan. 2.. Financial Year Ended 31 st December FY2009 FY2010 FY2011 FY 2012 FY 2012 FY 2013 (in USD '000) Q1 Q1 Net Profit 1,783 (345) 1,463 1, Net Worth 30,804 29,046 30,468 31,218 34,142 31,632 Total Assets 48,794 43,157 42,306 46,244 43,470 46,481 ROE 5.79% -1.19% 4.80% 5.58% 2.88% 5.79% ROA 3.65% -0.80% 3.46% 3.89% 2.26% 3.94% Source: Audited financial statements for FY2009-FY2012 and management accounts for Q & Q

Jordan Trade Facilities Company GMFA Stake: 87.30% Company Website: www.jtf.com.

3 Jordan Trade Facilities Company GMFA Stake: 87.30% Company Website: JOTF provides financing for vehicles and durable assets and is one of the first companies to enter the consumer finance business in Jordan. JOTF is diversifying its product portfolio and has ventured in credit cards and SME financing. For Q1 2013, interest income improved by 70% to reach USD 1.8mn, compared to USD 1.1mn for Q Net interest income improved by 85.3%, clocking at USD 1.4mn, while loan portfolio increased by 9.7%, over Q Sequentially, net profit improved to USD 530K against USD 235K for Q In the beginning of FY 2013, JOTF successfully repaid its 5 year bond and raised USD 7mn by issuing a new five year bond. For the FY 2012, JOTF distributed dividend of USD 2.1mn (GMFA received USD 1.8mn), equivalent to a dividend yield of 8.3%. JOTF is diversifying the product suite-- efforts are afoot to expand the leasing businesses and open new branches. A new branch in Aqaba has commenced operations since June In addition, JOTF is considering expanding its SME portfolio and is looking to collaborate with Multilateral donors for this purpose. Financial Year Ended 31 st December FY2009 FY2010 FY2011 FY 2012 FY 2012 FY 2013 (in USD '000) Q1 Q1 Net Profit 370 2,045 1,965 1, Net Worth 25,630 27,661 27,772 27,909 27,894 28,565 Total Assets 42,196 41,433 44,016 49,137 42,295 45,259 ROE 1.44% 7.39% 7.08% 7.15% 3.36% 7.42% ROA 0.87% 4.94% 4.46% 4.06% 2.22% 4.68% Source: Audited financial statements for FY2009-FY2012 and management accounts for Q & Q

PTC India Financial Services Ltd. GMFA Stake: 3.68% Investment Date: March 2011 Company Website: www.ptcfinancial.

4 PTC India Financial Services Ltd. GMFA Stake: 3.68% Investment Date: March 2011 Company Website: PTC India Financial Services Ltd ( PFS ) is a non-banking financial institution promoted by PTC India Limited ( PTC ) to make principal investments in, and provide financial solutions to companies with projects across the energy value chain. For the FY 2013 (ended March 2013), PFS posted an interest income of USD 46.2mn compared to USD 26.1mn for FY 2012, registering a growth of 77%. Net Interest Income (NII) increased to USD 27.6mn from USD 13mn last year, while the profit before tax (PBT) stood at USD 28.36mn, compared to USD 41mn in FY2012, which included USD25.9mn of profit on sale of an investment. Adjusting for the investment gain in FY 2012, the profit before tax recorded a growth of 88% over last year. As of 31 st March 2013, the effective term loans sanctioned by PFS aggregated to USD 1.68bn, supporting capacity creation of more than 30,000MW. In view of recent uncertainties in the power sector, PFS has been consciously diversifying the portfolio and offering advisory services with focus on lending to renewable power projects. The Board of Directors of PFS has recommended 4% dividend for the financial year Rs.0.40 per equity share of Rs.10 each. Financial Year Ended 31 st March FY2010 FY2011 FY2012 FY2013 (in USD '000) Net Profit 5,659 8,339 30,278 19,162 Net Worth 141, , , ,580 Total Assets 213, , , ,351 ROE 4.01% 3.64% 13.24% 8.50% ROA 2.65% 2.18% 7.88% 3.59% 4 Source: Audited financial statements.

5 Al Manar Financing & Leasing GMFA Stake: 13.7% Company Website: Al Manar Financing and Leasing Company ( Al Manar ) is an Islamic financial institution providing Islamic Shari'ah compliant financial products and services across variety of sectors, including consumer, real estate and fleet financing. Al Manar recorded USD10.4mn of net interest income during 2012, compared to USD11.69mn for the FY2011. The Company s overall profitability for the period stood at USD4.2mn compared to losses of USD13.1mn for FY The management continues to improve operational efficiency by optimizing G&A expenses and refinancing existing loans with new ones at lower rate (interest expense up by 2% despite 22% increase in ending debt balance). Net interest margin for 2012 stood at 10.43% compared to 12.76% last year. Interest spread decreased to 1.33% compared to 2.08% for the FY2011. The Board of Al Manar has stressed on reducing funding cost and diversifying funding sources. Introduction of fiduciary accounts is likely to positively impact the company s cost of funding and is expected to help raise significant amounts. Management is also considering automobile trade financing options for large fleet transactions. Financial Year Ended 31 st December FY2009 FY2010 FY2011 FY 2012 (in USD '000) Net Profit (14,511) 2,709 (13,131) 4,187 Net Worth 116, , , ,900 Total Assets 282, , , ,631 ROE % 2.24% % 3.74% ROA -5.13% 1.27% -7.60% 2.19% Source: Audited financial statements. Q performance was not available as of the date of finalization of this update. 5

Al Soor Financing & Leasing GMFA Stake: 12.4% Company Website: www.alsoorfinance.

6 Al Soor Financing & Leasing GMFA Stake: 12.4% Company Website: Al-Soor Financing and Leasing Company KSCC ( Al-Soor ) is a closed Kuwaiti shareholding company offering consumer finance, trade finance, and supplementary home improvement finance. For the financial year ended 31 Mar 2013, Al Soor recorded net interest income of USD 25.5mn compared to USD 22.3mn for the last year. Non-interest income, comprising of mainly management fees, improved to USD 782k. Net profit stood at USD 13mn against USD 7.1mn in FY The improvement is on account of lower bad debt provision and higher net interest income for FY New financing for the year increased by 30% to clock at USD 293mn, against USD 224mn in FY The increase is due to improvement in retail operations where financing increased from USD 68mn to USD 128.5mn. During the year, Al Soor managed to sell USD 48mn of its receivable portfolio to a Kuwaiti Commercial Bank. Al Soor will retain the management of the portfolio, earn a management fee and share the interest income with the Bank. Financial Year Ended 31 st March FY2010 FY2011 FY2012 FY2013 (in USD '000). Net Profit 18,454 14,808 7,069 13,006 Net Worth 227, , , ,297 Total Assets 377, , , ,206 ROE 8.11% 5.85% 2.86% 5.13% ROA 4.88% 3.79% 1.72% 2.92% 6 Source: Audited financial statements.

7 Asian Finance Bank GMFA Stake: 6.67% Company Website: Asian Finance Bank (AFB) is one of the three licensed foreign Islamic banks operating in Malaysia offering full range Shari ah compliant banking products for retail and corporate clients. It also provides some investment banking services. For Q1 2013, AFB s finance income improved by 8.3% to reach USD 7.5mn, net finance income however reduced to USD 1.87mn from USD 2.07mn in Q The drop is attributable to increase in depositors rate by 19bp while the lending rates on the average dropped from 5.94% to 4.94%. Net profit during the quarter improved to USD1.27mn over USD 367K for Q The improvement is attributable to a provision reversal of USD 377k due to improved collections on certain impaired accounts, besides streamlining of G&A and personnel expenses. In line with its growth strategy, AFB is leveraging on its Middle Eastern connection to create and bridge business opportunities between Malaysia and the Middle East as well as regionally, especially for funding in the oil and gas, shipping, aviation, infrastructure and real estate sectors. Qatar Islamic Bank ( QIB ) is actively assisting the bank to set up an investment banking arm which will share some of QIB s infrastructure for Middle Eastern clients. Financial Year Ended 31 st December FY2009 FY2010 FY2011 FY 2012 FY 2012 FY 2013 (in USD '000) Q1 Q1 Net Profit 461 (10,420) (1,892) (2,298) 367 1,272 Net Worth 95, , , , , ,484 Total Assets 605, , , , , ,885 ROE 0.48% -8.35% (1.25%) (1.45%) 0.24% 0.83% ROA 0.08% -1.43% (0.25%) (0.24%) 0.04% 0.15% 7 Source: Audited financial statements for FY2009-FY2012 and management accounts for Q & Q

BMI Bank BSC 8 GMFA Stake: 10.0% Company Website: www.bmibank.com.

8 BMI Bank BSC 8 GMFA Stake: 10.0% Company Website: BMI Bank (previously Bank Muscat International) is engaged in commercial banking activities through its eight branches in Bahrain, Qatar, and Seychelles. BMI currently offers a wide range of financial solutions through retail banking including SME banking, corporate banking, private banking, global trade services, international business development, financial institutions, correspondent banking, Islamic financial services and treasury services. For Q1 2013, the Bank posted net profit of USD 894 K against USD 387K for Q and budgeted net profit of USD 565K. Q turned out to be the seventh consecutive quarter of profit for BMI. Net interest income clocked at USD12mn, compared to USD10.5mn for Q1 2012, registering a growth of 15%. On the other hand, non interest income comprising of investment income, trade finance and fee reduced to USD 2.88mn from USD 3.756mn last year, a near 23% drop. Provision for bad debt reduced to USD 1.2mn from USD 2.82mn in Q There has been a modest growth in the asset portfolio-15% across all lines of business despite customers staying cautious in drawing down limits due to political uncertainty. Financial Year Ended 31 st December FY2009 FY2010 FY2011 FY 2012 FY 2012 FY 2013 (in USD '000) Q1 Q1 Net Profit (44,936) (70,242) (8,960) 1, Net Worth 298, , , , , ,146 Total Assets 1,786,089 1,565,989 1,654,867 2,027,860 1,848,273 2,026,419 ROE % % -4.07% 0.58% 0.7% 1.56% ROA -2.52% -4.49% -0.54% 0.07% 0.08% 0.17% Source: Audited financial statements for FY2009-FY2012 and management accounts for Q & Q

9 Industrial Bank of Kuwait GMFA Stake: 2.50% Company Website: The Industrial Bank of Kuwait ( IBK ) was established with the initiative of Government of Kuwait for the purpose of supporting industrial projects in Kuwait. The company provides medium and long-term financing for the establishment, expansion, and modernization of the industrial sector in Kuwait. For the year ended December 2012, Bank s net income marginally decreased to USD29.9mn from USD30.1mn in FY There has been no significant change in IBK s net interest income and net profits, whereas the financing portfolio has decreased by 4.4% due to conservative lending policies pursued in the wake of sluggish growth in the Kuwait Economy. In 2012 the Bank approved the financing of 25 industrial projects for sectors including manufacturing chemical products, paper manufacturing, printing and publishing, and electrical equipment. In December 2012, Fitch Ratings re-affirmed IBK s Long-term Issuer Default Rating (IDR) at 'A+' with a Stable Outlook. For FY 2012, IBK s Board has recommended a distribution of 20% of the share capital as a dividend which translates to USD 355 K dividend for GMFA, equivalent to a dividend yield of 1.3%. Financial Year Ended 31 st December FY2008 FY2009 FY2010 FY2011 FY 2012 (in USD 000) Net Profit 34,161 10,623 28,621 30,135 29,571 Net Worth 716, , , , ,378 Total Assets 2,073,553 2,196,251 2,162,396 2,342,537 2,346,118 ROE 4.77% 1.58% 3.96% 4.04% 3.99% ROA 1.65% 0.48% 1.32% 1.29% 1.26% 9 Source: Audited financial statements.

10 Gulf Takaful Insurance Company GMFA Stake: 18.2% Company Website: Gulf Takaful Insurance Company( GTIC ) is a closed Shariah compliant shareholding company offering motor, property, general accident insurance, re-insurance products and insurance appraisals. Gulf Takaful has the largest medical provider s network in Kuwait, which includes over 74 hospitals, clinics, pharmacies and labs. For the FY2012, gross written premium stood at USD 18mn, a near 4% increase over last year. Net deficit in insurance operations remained at USD 2.5mn (same as FY 2011), while investment losses for the year stood at USD 5.68mn, compared to USD 454 K for the previous year. Investment losses coupled with lower interest income contributed to losses of USD 3.59mn against a profit of USD 1.35mn for FY GMFA continues to emphasize on the management to enhance the quality of the insurance portfolio, in addition to improving top line by introducing new products, increasing client base, achieving cost reduction, improving portfolio quality. To enhance organizational and management efficiency and consolidate risk management framework, the Board of GTIC has recommended implementation of enterprise risk management system. 10 Financial Year Ended 31 st December FY2009 FY2010 FY2011 FY2012 (in USD '000) Gross Premiums 15,769 14,245 17,320 17,918 Net Profit (5,318) (2,514) 1,346-3,591 Net Worth 49,821 49,016 50,533 45,945 Total Assets 52,720 51,971 52,273 47,778 ROE -10.7% -5.1% 2.66% -7.82% ROA -10.1% -4.8% 2.57% -7.52% Source: Audited financial statements. Q performance was not available as of the date of finalization of this update.

11 Al Fajer Retakaful Insurance Company GMFA Stake: 20% Investment Date: January 2010 Company Website: Al Fajer is the first retakaful company in Kuwait. The company has a paid up capital of KD 50mn (US$175.1mn), and a license to operate reinsurance business for all kinds of takaful insurance. For the FY 2013 (ending March 2013), gross written contributions improved by 5.5%, totaling to USD 67mn, compared to USD 63.7mn for FY However the surplus in insurance operations reduced to USD 1.4mn from USD 3mn in FY The decline is attributable to currency losses on the policies written for some of the European clients. Net Investment income (shareholders fund) stood at USD 3.5mn compared to USD 791k for the last year. This was achieved despite impairment in investments in some of the third party investment funds during the year. Net profit for shareholders stood at USD 9.1mn compared to USD 789K in FY The outlook rating for Al Fajer has been revised from negative to stable by leading rating agencies. Efforts are afoot to establish a new entity in DIFC Dubai and to relocate the operation of the Company to DIFC before the beginning of the renewal season. The rationale of the move is to operate from a better regulated environment offered by DIFC. 11 Financial Year Ended 31 st March FY2010 FY2011 FY2012 FY 2013 (in USD '000) Gross Contributions 44,290 56,280 63,764 67,265 Net Profit (19,578) ,129 Net Worth 163, , , ,897 Total Assets 163, , , ,034 ROE -12.8% 0.08% 0.5% 5.54% ROA -12.8% 0.08% 0.47% 5.16% Source: Audited financial statements

12 For more information please contact: Rajiv Nakani, CFA Managing Partner Global Capital Management Ltd. T: F: Global Capital Management Ltd., 100% subsidiary of Global Investment House KSCC Global Tower, Sharq, Al Shuhada a Street, Kuwait

Portfolio Update September 2012

Portfolio Update September 2012 Bindar Trading and Investment GMFA Stake: 69.60% Company Website: www.bindar-jo.com Bindar Trading and Investment ( Bindar ) is one of the largest consumer finance companies