IslamicFinance.de

Press Release

*Bahrain-based Gulf Finance House earlier today completed the partial extension of a
$100 million facility. We consider this as another "distressed exchange" due to
partial extension of initial maturity. *We then reassessed GFH's creditworthiness
and raised the ratings to 'CCC-/C'. *The outlook is negative and reflects our
opinion of GFH's very weak liquidity position, from a rating standpoint, because it
still faces challenges to meet debt repayments coming due in the very near term.

PARIS (Standard & Poor's) March 3, 2010--Standard & Poor's Ratings Services today
said it raised its long- and short-term counterparty credit ratings on Bahrain-based
Gulf Finance House G.S.C. (GFH) to 'CCC-/C' from 'SD/SD' (selective default). The
outlook is negative.

"The rating action follows GFH's completion of the partial extension of maturity of
a $100 million facility," said Standard & Poor's credit analyst Goeksenin Karagoez.

The first tranche of this facility was a $50 million payment due March 3, 2010, with
the remainder due on March 3, 2011. We understand that GFH has obtained consent for

ABC Islamic Bank along with Noor Islamic Bank PJSC and Standard Chartered Bank have been mandated by Turkey’s Bank Asya to arrange a US$75 million (and/or equivalent in Euros) syndicated dual currency Murabaha financing facility (the “Facility”).

The facility which offers a profit margin of 225bps over the applicable benchmark has been structured as a Shari’a compliant dual-currency facility with a one-year tenor. Proceeds will be used to fund Bank Asya’s Islamic trade finance activities.

The Bahrain-based Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) is co-operating with the Mufties Council of Russia to translate AAOIFI's international Islamic finance standards into Russian language. The translated standards are expected to help regulatory authorities and financial institutions in developing Islamic finance in jurisdictions that use Russian language as their official language.

Efforts to make Bahrain and its economy more business friendly has attracted growing interest from the Gulf and beyond, Rasheed Al-Maraj, the Governor of the Central Bank of Bahrain (CBB), told CNBC Europe’s “Closing Bell” programme in an interview from the World Economic Forum (WEF) Annual Meeting in Davos, Switzerland.

Khaleeji Commercial Bank head of treasury and capital markets Hussam Saif was a key speaker at the Leaders Summit Conference held in India.

Gulf Finance House plans to raise $250 million through asset sales this quarter, and has made lay-offs to cut costs after a regional real estate boom ended, its acting CEO told Reuters on Tuesday.

The Central Bank of Bahrain (CBB) announces that the monthly issue of the Sukuk Al-Salam Islamic securities has been oversubscribed. Subscriptions worth BD63m were received for the BD12m issue, which carries a maturity of 91 days. The expected return on the issue, which begins on 27 January 2010 and matures on 28 April 2010, is 1.05%.

Press Release

Bahrain-Based Gulf Finance House Lowered To 'SD/SD' (Selective Default) On Partial Debt Extension

*Bahrain-based Gulf Finance House (GFH) yesterday extended the maturity of $100
million of its $300 million syndicated loan by six months. *Because we consider the
partial debt maturity extension a "distressed exchange", we are downgrading GFH to
'SD/SD' (selective default) from 'CC/C'. *We expect GFH to soon extend the maturity
of another facility (subject to final approval from all syndicate members). Once the
maturity extension is finalized, we plan to reassess GFH's credit standing and
change the ratings accordingly.

PARIS (Standard & Poor's) Feb. 10, 2010--Standard & Poor's Ratings Services said
today it lowered its long- and short-term counterparty credit ratings on
Bahrain-based Gulf Finance House G.S.C. (GFH) to 'SD/SD' (selective default) from
'CC/C'.

"The downgrade to 'SD/SD' follows GFH's completion of the extension of maturity of
$100 million of its $300 million syndicated loan facility due Feb. 10, 2010," said
Standard & Poor's credit analyst Emmanuel Volland.

Bahrain-based Islamic lender Al Baraka is in talks to buy a stake in Malaysia's Bank Muamalat, its chief executive said, with a source adding it could buy up to 49 percent in the lender.

Nobel Laureate Professor Muhammad Yunus and the Chairman of the Board of Trustees of the Royal Charities Organization, Prince Shaikh Nasser bin Hamad Al Khalifa inaugurated the Family Bank, a microfinance bank licensed by the Central Bank of Bahrain, at a ceremony held at the Gulf Hotel Convention Hall in Bahrain recently.

Legal & General Gulf Takaful B.S.C (c), a wholly owned subsidiary of Legal & General Gulf B.S.C (c), a joint venture between UK-based Legal & General Group Plc and Ahli United Bank Group (AUB), announced the launch of its retail business in Bahrain.

The report on Social Responsibility Trends at Islamic Financial Institutions presents the results of an extensive survey on Social Responsibility at Islamic Financial Institutions (IFIs) carried out during summer and fall of 2009 by DinarStandard and Dar Al Istithmar with the support of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI).

Some key findings of the survey were:

Clients: 100% of respondents answered yes to having a policy to screen prospective clients which is actively implemented. Similarly 97% have an organizational policy that deals with client responsibly.

Employees: 83% of respondents’ state having policies that provide equal opportunity to all their employees, 93% have policies that ensures merit-based salary and promotion, and 86% having policies that specifically prohibits any kind of discrimination. However, when it comes to having policy to monitor employees from different backgrounds and gender, the response was mix with only 52% admitting to having such a monitoring policy and 48% not having any such policy.

Bahrain-based Sakana Holistic Housing Solutions and BMI Bank (BMI), an associate of Bank Muscat, signed a Commodity Murabaha Islamic Financing facility whereby BMI Bank provided BD 3 Million funding for 1 year to Sakana towards working capital requirements.

This agreement is in continuation of a 2 year relationship which both organizations with Islamic financing facilities amounting to BD 8.2 Million extended by BMI to Sakana which were repaid on due date.

Press Release

• The improvement in the liquidity position of Bahrain-based Islamic wholesale investment bank Gulf Finance House proved to be more limited, in our view, than we had previously expected.
• We consider the recent unexpected departure of the CEO and the end to talks about a joint venture with Macquarie to be additional challenges to revenue generation.
• We are lowering our long-term rating on GFH to 'B+' from 'BB+' and placing it on CreditWatch with negative implications.
• The negative implications reflect the uncertainties we see about the execution of GFH's measures to improve funding and liquidity.

PARIS (Standard & Poor's) Jan. 14, 2010--Standard & Poor's Ratings Services lowered its long-term counterparty credit rating on Bahrain-based Gulf Finance House G.S.C. (GFH) to 'B+' from 'BB+' and affirmed its 'B' short-term rating. In addition, we placed both the long- and short-term ratings on CreditWatch with negative implications.

The World Bank plans to support standard-setting bodies of the Islamic finance industry in turning their voluntary standards into binding banking regulations, a bank official said.

Bahrain-listed Takaful International Co. BSC said it has signed an agreement with Hannover Retakaful to increase its family takaful insurance coverage up to US$5 million per individual, aiming to improve its insurance services and portfolio expansions.

Gulf Finance House announced that the Board of Directors has reluctantly accepted Mr. Ahmed Fahour's resignation as a Board Member and Group CEO of the Bank. Mr Fahour has been appointed by the Australian Government as the Managing Director of Australia Post. Dr Janahi announced the departure of Ahmed Fahour and the appointment with immediate effect of Ted Pretty as Acting CEO of GFHGFH

Gulf Finance House (GFH), the leading Middle Eastern Islamic investment bank announced today that the Board has appointed Mr. Ted Pretty as Group Deputy CEO of the Bank.

The World Bank plans to support standard-setting bodies of the Islamic finance industry in turning their voluntary standards into binding banking regulations.

Bahrain's emergence as an Islamic banking hub has spurred Tamkeen to put in place an ambitious plan to train 130 Bahraini graduates in Islamic finance and business accounting.