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18 April 2024

GIC reports sharp drop in 2007 profits

By Agencies


Kuwait-based Gulf Investment Corporation said on Wednesday its net profits in 2007 dropped sharply because of volatility on international capital markets and the credit squeeze.

GIC said it posted $253 million last year, a 58 per cent drop compared to $600m reported in 2006, but described the results as "good" considering negative financial developments.

"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," chairman Yousef Hamad Al Ebraheem said in a statement.

He said GIC plans to open branches in some Gulf Co-operation Council (GCC) states this year to implement its expansion strategy in the coming five years.

CEO Hisham Al Razzuqi said "GIC made provisions for the impairment in the value of its portfolio of structured credit and structured investment vehicles amounting to $246 million."

"The main problem was the lack of liquidity internationally, which affected the way and the cost of financing these funds," he said.

GIC was established in 1983 by the GCC and is owned equally by the six member states of the oil-rich bloc – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

The corporation, which has authorised capital of $2.1 billion, focuses on developing private enterprise and economic growth in the Gulf market by offering financial products and services. (AFP)