Gulf Finance House (GFH) has unveiled plans to undergo a radical shift in its business to decrease the proportion of real estate assets on its balance sheet to 20 per cent from 80 per cent.

According to the new chief executive of the bank, Ahmed Fahour, GFH’s opportunities for growth lie in banking activities, and not in real estate projects. As part of a strategy to transform the business spearheaded by Fahour, GFH will reduce its real estate business to 20 per cent of total assets, while developing its investment and commercial banking operations.

As part of the reorganisation of the business Fahour says, “We will be working to strengthen the balance sheet and extract value from legacy assets.” This will mean reducing real estate exposure and selling off non-strategic assets.

“The reality is the economic crisis has hit the real estate sector pretty hard, and we have some legacy assets that we need to extract value from,” Fahour adds.

GFH’s real estate exposure includes projects in Dubai, Jordan and Morocco, and Energy Cities in Qatar, India, and Libya.

The focus of the firm will now be developing its banking operations across the region in partnership with Australia’s Macquarie Group. “We will be putting together Macquarie’s investment banking resources in the region to offer Sharia compliant products to our clients, and using their global reach to offer our services to their clients around the world.”

Despite this shift, Fahour says that development projects will continue to be launched by GFH. “We are aiming to launch a new project in the fourth quarter,” he adds.

“There is still a role for GFH in marrying up government infrastructure needs with investors. So we will continue to do that, but we will also be expanding our venture capital, private equity and advisory business through the deal with Macquarie,” says Fahour.

The new strategy was presented to shareholders at a meeting in Kuwait on 30 September (MEED 24:7:09).