GFH setting up unit in Syria

Bahrain's Gulf Finance House (GFH) said it was close to setting up a $326 million (Dh1.19 billion) unit in Syria as the Islamic investment bank looks to boost revenues in a relatively untapped banking market.

Shares in GFH were unchanged on the Bahrain stock exchange yesterday. In Kuwait, the shares were 1.4 per cent higher.

Syria Finance House, with a capital of S£1 bn (Dh1.19bn), would be GFH's first expansion with the potential to bring additional fee income in about a year.

GFH and other financial institutions will fund 60 per cent of the new bank, while 10 per cent will come from local investors. The remaining 30 per cent will be offered to the public, GFH said in a statement, adding the venture was still awaiting central bank approval.

"Islamic commercial and investment banking in Syria promises great potential for growth with a significant demand for Islamic financial services and low penetration," said Group Chief Executive Ted Pretty.

GFH, which was hard-hit by a property crash in the Gulf, escaped default on a $300m loan in February by striking an eleventh-hour deal to roll over one third of the debt by six months.

Seven years ago, Syria relinquished its monopoly of the banking sector which was nationalised along with much of the rest of the economy after the ruling Baath Party took power in 1963.

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