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(Manama, 16 November 2011) Seera Investment Bank B.S.C.(c), a Shari’a compliant investment bank headquartered in Bahrain announced its results for the first 9 months of this year.
Seera reported a net profit of $64 million for the 9 months period ending September 30, 2011 compared to a profit of $7 million for the same period last year.
These strong results reflect the performance of Seera’s investment portfolio and confirm the fact that Seera is showing a very healthy trend of gradually improving financial results. A recent exit from one of the Bank’s major investments contributed significantly to these results. Foreign exchange accounting on non-US dollar long term investments resulted in a small net loss for the third quarter of less than $0.2 million compared to a profit of $4 million for the same quarter in 2010. Total assets at the end of the third quarter were $544 million, an increase of 27% compared to the same period in 2010.
Given the uncertainties and the current market turbulence, there has not been any major new investment activity in the third quarter and therefore the results for the 9 months period reflect more broadly Seera’s investment activities in 2011. Generally, the Bank’s investment portfolio has shown a very good level of resilience during the financial crisis and strong performance since then.
“Seera’s strategy is to invest in companies with strong fundamentals and an experienced management team focusing mainly on industries which are not highly cyclical. This strategy has seen Seera through the worst financial crisis and the subsequent challenging global economic environment. We are very pleased with these positive results and feel that they fairly reflect Seera’s strategy to invest in sectors and asset classes with appropriate levels of risk and with strong growth prospects. There is no doubt that our disciplined approach has been key to Seera realizing value from investments, even in difficult times. ” The Bank’s Chief Executive Officer, Mr Abdulla Janahi said.
On Seera’s most recent deal he said “BWA, our recent exit is a good example of our investment approach. The UK based company was acquired just before the onset of the financial crisis and Seera worked in close partnership with company management to mitigate the impact of the crisis and to grow its business. The successful exit demonstrated our ability to create value during this exceptionally challenging investment holding period.
Mr. Janahi further commented that “In line with our prudent investment strategy, the Bank diligently managed its balance sheet and avoided excessive leverage. Due to the cautious liquidity management approach, we were able to comfortably meet all our obligations on time. Over a year ago, we also initiated a program to implement an efficient and sustainable overhead operating base and ensured that an optimal operating environment is maintained. This prudent and cautious approach has been very good for Seera and is now being reflected on the Bank’s operating results.”
On the current markets and the future outlook, Mr Janahi added “There is a great deal of uncertainty and the markets are not as stable at present as we would like them to be especially given the sovereign debt issues in Europe, but we are hopeful that market stability will return in the foreseeable future. The recent financial crisis has forced investment banks globally and regionally to re-think their business strategy to better position themselves for future challenges and opportunities. Given the current markets, this is expected to be an ongoing process, and in spite of the uncertainty, we feel that Seera is in a good position to manage through these difficult markets, and to capitalize on investment opportunities that are in line with the Bank’s investment thesis.”
Seera has investments in the industrial manufacturing and transportation sectors in addition to smaller investments in the utilities and real estate sectors. The Bank’s investment strategy is to maintain a diversified investment portfolio geographically and industry wise, focusing mainly on defensive sectors underpinned by strong fundamental demand, and to avoid speculation driven sectors.
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