MANAMA: Bahrain's Gulf Finance House is considering increasing its stake in Khaleeji Commercial Bank instead of selling it under its asset sales program, its chief executive said on Tuesday. Like other Bahraini investment houses, GFH has been badly hit by a regional real estate crunch and narrowly escaped default in February by striking an eleventh-hour deal with lenders to roll over one third of a $300 million loan. Analysts and bankers have said that it needs to sell down assets to avoid further funding difficulties and that its 37 percent stake in Bahrain's Khaleeji was its most attractive asset compared to its real estate holdings. Ted Pretty told reporters in Manama that GFH was no longer considering selling its stake in the bank that said on Tuesday it plans to enter retail banking in Bahrain and in the region. "Our shareholding in Khaleeji, I actually want more of Khaleeji, than sell it," he said. He said that the shareholding in Khaleeji was increasingly attractive to GFH due to the plans to enter the more stable retail business. GFH on Sunday posted an 80 percent decline in first-quarter losses on lower costs, reached partially through job cuts, with income recovering from the lows seen at the end of 2009. Pretty also said that GFH would have to delay exiting some of its real estate projects. GFH was very profitable during a five-year long regional oil and property boom by earning fees on raising money for real estate projects, including in Morocco, Kazakhstan and Qatar. Any delays in exiting these projects would make it more difficult for GFH to place new projects with investors due to the reputational blow, but it has also co-invested in the projects alongside investors. Pretty declined to provide details, saying every project was under review and that information would be send to investors shortly. "I want to give them a realistic view of the exit time-table, not promise another short-term return," he said.
