At the annual general meeting (AGM) of National Finance House (NFH) held on 27 February 2019, shareholders of the Bahraini-incorporated finance provider approved distribution of a cash dividend for 2018 of 8 per cent (BD 600 thousand) of paid-up capital.
Chairman of the Board, Mr. Talal Fuad Kanoo, told shareholders: “I am pleased to report that NFH posted a strong financial performance in 2018. Despite another challenging period for Bahrain’s vehicle financing sector, the Group’s net profit increased by 6 per cent to BD 1.27 million, marking the fifth consecutive year in which profitability has exceeded BD 1 million.
“The improved net profit reflects the remarkable business growth achieved in 2018. The total value of disbursed loans increased by 20 per cent to BD 25.64 million; while market share grew by over a third to a new high of 17.24 per cent since NFH commenced operations in 2006,” Mr. Kanoo pointed out.
Putting the Group’s financial results into context, Chief Executive Officer Venkatachalam PS highlighted that NFH continued to maintain a strong balance sheet, with total assets at the end of the year increasing to BD 56.07 million from BD 53.12 million at the end of 2017. Shareholders’ equity totaled BD 14.52 million, resulting in a return on average equity of 8.77 per cent; while earnings per share increased to Bahraini fils 17.0 from 16.0 fils a year earlier.
For the three-month period ended 31 December 2018, NFH reported an improved net profit of BD 305,264 compared with BD 299,740 for the fourth quarter of 2017.
“In terms of implementing our strategy to diversify the Group’s business lines and revenue streams, I am pleased to report that the new NFH Auto Mall will open shortly in Sitra,” announced Mr. Kanoo. “This will complement the Group’s core business of auto finance by offering multiple in-house services all under one roof, including vehicle registration and insurance cover, and thereby providing a convenient one-stop shop for our customers.”
Looking ahead, Mr. Kanoo said that the Board of Directors is optimistic about the Group’s prospects in 2019. “According to the International Monetary Fund, the Kingdom of Bahrain is expected to be the fastest-growing economy in the GCC for the second consecutive year in 2018; and is forecasting Bahrain’s GDP to grow by 2.6 per cent in 2019. This will be supported by higher oil prices; stronger non-oil sector growth; improved economic and market conditions arising from the Government’s reform initiatives; and continued regional fiscal support.
“Such factors should have a positive impact on the Group’s activities despite an increasingly competitive vehicle financing sector,” he pointed out. “During the coming year, we will maintain our prudent approach to doing business; and also continue to provide the highest standards of customer service, which is a distinct competitive differentiator for NFH.”
Mr. Kanoo paid tribute to Mr. Farouk Almoayyed, who resigned from the Board during 2018, having served as a Director since the Group’s inception and as Chairman since 2007. “During his distinguished tenure, Farouk has guided the growth and development of NFH into a highly-respected player in Bahrain’s vehicle financing sector. His unique vision, inspired leadership and wise counsel will be sorely missed.”
The Chairman welcomed Mr. Redha Abdulla Faraj and Mr. Robert Pancras as new members of the Board, who bring with them diverse business experience and expertise; and thanked retiring members Mr. Fuad Ebrahim Kanoo and Mr. Shrikanth Shenoy, for their valuable contributions. He also expressed the Board’s appreciation to the Chief Executive Officer Mr. Venkatachalam PS for his remarkable contribution to the Group over the past seven years; who would leave his position at the end of March 2019 to focus on his personal interests.