Dubai Islamic Bank outlines 2009 growth strategy

Maktoob:Dubai Islamic Bank (DIB), one of the UAE’s top five banks and the world’s third largest Islamic bank, today outlined its aggressive growth strategy for 2009. Despite extremely challenging financial conditions globally, the bank projects that the expansion of its retail banking business, including 10 new branch openings in the UAE this year, will contribute significantly to its projected annual balance sheet growth and will account for approximately 47 percent of the bank’s revenue for 2009...Read More

Dubai Islamic Bank announces 2008 net profit of AED 1.73 billion

Eye of Dubai:Dubai Islamic Bank (DIB) announced today its financial results for the 12 months ending December 31, 2008, demonstrating continued strong growth in its core operations despite extremely challenging global financial conditions.

DIB reported AED 1.73 billion in net profit for 2008, a marginal decline compared to AED 1.88 billion in 2007, excluding an extraordinary gain on transfer from a DIB subsidiary..Read More

DIB to buy controlling stake in Jordan’s IDB

The National:Dubai Islamic Bank (DIB), in association with two finance houses, will buy a controlling stake in a small Jordanian bank, marking one of DIB’s first overseas acquisitions and a further spread of its Sharia banking products throughout the Middle East.

The takeover plan calls for Industrial Development Bank (IDB) – which is listed on the Amman Stock Exchange with a market capitalisation of 106.2 million Jordanian dinars (Dh554m) – to be converted into a Sharia-compliant institution, change its name to “Jordan Dubai Islamic Bank” and sell Islamic products to the Jordanian market.

DIB is working with Dubai International Capital and Jordan Dubai Capital to acquire a 52 per cent stake in the company.

Khaled al Kamda, the group managing director and chief executive of DIB, said the bank was intent on “expanding our business methods throughout the Arab and Muslim world”.

Walid Shihabi, the head of research at Shuaa Capital, said that while the Jordanian market did not yet have a large Islamic finance market, Sharia-compliant products would thrive in such a country.

“This is one of DIB’s very few forays outside of Dubai,” he said. “But Jordan’s banking sector is healthy and its stable economy means that the risk profile is low. This move could be an indication it is looking to expand outward.”

DIB already has subsidiaries in Pakistan and Sudan.

Some analysts express surprise at the deal – both at the small size of the takeover target and the fact that it is in Jordan.

“We knew that the Dubai Islamic Bank wanted to expand, but I expected it to go first into the GCC or North Africa,” said Raj Mahda, a banking analyst at EFG-Hermes. “All of the financial institutions are looking to expand beyond their borders, but the question is: where can you go? They often find that opportunities are limited in the GCC and prices are not cheap in North Africa.”

The Jordanian financial market is already popular with other GCC financial institutions. Last year, the Qatar National Bank acquired a 30 per cent stake in Jordan’s Housing Bank for Trading and Finance.

DIB claims it will modernise the Industrial Development Bank when the takeover is complete. Mr Shihabi said this was in line in DIB’s high reputation in the market.

“It is not just an Islamic bank, it is a successful bank,” he said.

“It is among the most advanced banks domestically and strong on a number of fronts; buying into a Jordanian bank allows it to grow the business and integrate at low cost.”

The IDB is one of the smallest banks in Jordan by market capitalisation.

DIB’s shares closed yesterday at Dh7.04 (US$1.9), down 1.81 per cent, before the acquisition news had been released.

Dubai Bank eyes global status

Economic Times: Dubai Bank plans to become a major global Islamic lender over the next five years through acquisitions and has set up a $5 bn financing programme to aid expansion, its chief financial officer said on Sunday.

The bank, a unit of Dubai Banking Group, has "pretty much the same aspirations" as group affiliate Noor Islamic Bank, which is aiming to be the world's largest Islamic bank within five years, Ahmed El Shall told media in an interview.

"We have a specific strategy to be by 2011 a major force to contend with in the Islamic bank arena," he said. "(Within five years) I can see Dubai Bank almost on a global basis and represented in Europe, very much in Asia and Africa and at regional level in other GCC countries."

Dubai Banking Group, a unit of Dubai Holding which is owned by the ruler of Dubai, has a 40 per cent stake in Bank Islam, Malaysia's oldest and largest Islamic bank, and a 40 percent stake in ACR Re-Takaful Holdings Ltd, the world's largest reinsurance company.

The group is looking to continue its expansion into Asia and Africa and would use the Dubai Bank brand to enter the banking sector in those markets, Shall said.

"It will be a combination of organic and acquisition (based) growth ... There are negotiations for joint ventures with certain countries whereby the target is to make sure we have control of an existing business," he added, declining to be more specific.

Dubai's government, ruler Sheikh Mohammed bin Rashid al-Maktoum and 15 other individuals put 3.16 bn dirhams ($860.6 mn) into Noor Islamic Bank in 2007 and the bank has set a five-year target to become the largest Islamic lender.

Shall, whose bank has a capital of 2.2 bn dirhams including reserves, said there was room for two large Islamic institutions within the same company, although acknowledged that in the long term it may make sense to merge the two.

"Looking at the future, it would not be out of the question if you see that one of the entities acquires the other one," Shall said, adding that there were no such plans at the moment.

The bank, with assets of about 16 bn dirhams, has also set up a $5 billion medium-term note programme to help finance the proposed expansion, although the bank is waiting for the "opportune" moment before tapping the debt markets.

"All options are on the table ... we're looking at the sukuk (Islamic bonds) market and syndicated loans," Shall said, declining to identify the banks mandated to arrange the programme.

Dubai Islamic Bank implements Oracle's FLEXCUBE

Dubai Islamic Bank (DIB) and i-flex solutions announced that it has adopted FLEXCUBE Islamic Banking across all its branches and Networks. Oracle's FLEXCUBE®, a revolutionary banking system, will provide more comprehensive solutions covering all areas of banking transactions. It will provide customers with greater flexibility, faster processing and a more personalised service.

As a result of the new system, bank customers can now perform a range of transactions from any of the bank branches irrespective of where their account is lodged. In addition, the bank will be able to provide more customised services, achieve a quicker and more cost-effective launch of future products and lower costs for future products.

"As the world's first Islamic bank and a leader in the Islamic finance industry, we have strived to maintain our industry leadership through innovative and superior systems and offerings," said Musabah Al Qaizi, Head of Electronic Banking Service Department. "Our new technical platform is in line with this commitment and will provide a much more personalised and versatile platform for our customers."

Oracle's FLEXCUBE is a complete banking product suite covering all areas of banking needs, including retail, corporate and investment banking, and is in line with internationally recognised standards.

Nadeem Bucheri, Head of Information Technology Department said, "We have been working on implementing FLEXCUBE for 20 months and we are now pleased to announce that this has been deployed across our entire network. This system empowers us with a comprehensive Islamic banking platform and enables us to offer leading edge Islamic products and services. In addition, it provides us with greater agility for future product development."

S.Sundarajan, Customer Fulfilment, Senior Vice-President, Banking Products, i-flex solutions said: "We are very happy that DIB has gone live on FLEXCUBE. Our association with DIB, one of the oldest and most respected Islamic banks, is an acknowledgement of FLEXCUBE's ability to meet Sharia requirements. We are confident that this implementation will enable DIB to meet the expectations of its customers for Islamic banking products that compare in innovativeness and versatility with the best that conventional banking can offer."

Dubai Islamic to arrange 3 Islamic bonds in month

DUBAI: Dubai Islamic Bank said on Sunday it expects to arrange the sale of three Islamic bonds for companies based in the United Arab Emirates of between 500 million U.S. dollars and $800 million each in the coming month.

Islamic bonds, or Sukuk, will be denominated in U.S. dollars and UAE dirhams, Sohail Zubairi, Dubai Islamic senior viceـpresident and head of Sharia coordination, told reporters, adding he expected the sukuk market to pick up pace this year.
"At this stage, we are working on three large Sukuk already ... from between $500 million to $750ـ$800 million," Zubairi said, without giving more details.A global credit crunch triggered by defaults on U.S. home loans had prompted several Gulf borrowers to postpone debt issues last year.

But the Sukuk market has gained momentum, encouraged by bets that Gulf Arab states could revalue their dollarـpegged currencies to dampen soaring inflation.
Currency speculation has prompted investors to pile into securities denominated in local currencies, breathing life back into the Sukuk market.

"I think the market is picking up in the second half of 2008 and it will take off immediately after (the holy month of) Ramadan," Zubairi said.Dubai Islamic, the Gulf region''s fourthـbiggest Islamic lender by market value, has completed over 400 billion dirhams worth of Islamic deals since 2002.

Islamic mortgage lender Tamweel said on July 15 it had sold 1.1 billion dirhams of fiveـyear Sukuk priced at the threeـmonth Emirates Interbank Offered Rate (EIBOR) plus 225 basis points. EIBOR is currently at 2.42 percent.Islamic law bans payment or receipt of interest and bondholders receive returns derived from underlying physical assets, such as rent from property.

DIB launches Islamic financing consultancy

Dubai: Dubai Islamic Bank (DIB) on Sunday launched a subsidiary - Dar Al Sharia Legal & Financial Consultancy, a one-stop solution centre for all Sharia, legal and financial consultancy for all types of Islamic financing and investment transactions.

Dar Al Sharia has evolved from the bank's Sharia Coordination department, which over the past four years has prepared structures and documents for more than 14,000 transactions valued at Dh400 billion, including many big ticket sukuk issues.

"Dar Al Sharia will take the success of the Sharia Coordination department forward in assisting the Islamic finance industry in preparing Sharia-compliant and legally viable financial structures," said Mohammad Ebrahim Al Shaibani, chairman of the board of directors of Dubai Islamic Bank and Director-General of the Ruler's Court.

Dar Al Sharia will carry out research and development, Sharia training, audit and rating functions.

The company will closely liaise with clients, lawyers, bankers and investors on an end-to-end basis, from the initial concept through to the completion of transaction structure and documentation.

Trendsetter

"As the world's first Islamic bank, DIB has established itself as the industry authority and trendsetter in Sharia best practices. DIB's first-mover advantage has given us immense expertise and strength, which will now be available to the industry at large. We are pleased to transform our Sharia expertise into the new consultancy firm, which literally means the house of Sharia," said Al Shaibani.

While Sohail Zubairi will be the new company's chief executive, Dr Hussain Hamed Hassan, chairman of the Sharia Board of DIB, will serve as a director.

Dubai Islamic Bank and Al Hamad Group sign US$235 million Islamic financing agreement

UAE. Dubai Islamic Bank (DIB) announced today that it has arranged Islamic financing totaling AED 824 million (US$235 million) for Al Hamad Group to finance a portion of the Remraam project coming up in Dubailand.

The total value of the contract for Al Hamad Group is AED 3.37 billion (US$963 million) and it consists of 108 residential buildings, including facilities such as shopping malls, health clubs, and mosques. Dubailand is being developed by Mizin, a member of Tatweer.

Ayman Kamal, Chief of Investments and Real Estate for DIB, said: “Dubai Islamic Bank plans to expand its business in the vital sector of Islamic financing for both regional and local reputed contractors. Our relationship with Al Hamad Group has developed extremely well, and their performance on awarded projects has been quite satisfactory.

“DIB continues to finance landmark construction projects both here in Dubai and across the wider region. Al Hamad Group is one of our elite clients, and our relationship with them extends across a range of significant projects,” he added.

Nashaat Sahawneh, Chairman of Al Hamad Group, said: “Our relationship with DIB began four years ago and has grown significantly since then. The bank has supported us in different projects worth over AED 9 billion. A majority of those projects have already been completed, while the others are progressing as per schedule. These projects are coming up in the UAE, Bahrain and Jordan. We are very pleased to further strengthen our partnership with DIB and appreciate the vital support the bank continues to extend to the Al Hamad Group.”

Located in Dubailand, adjacent to Bawadi Boulevard and Arabian Ranches, Remraam will be a green and vibrant master-planned community. offering a mix of residential units and wide range of community facilities, including parks, a dedicated shopping mall as well as entertainments.

DIB investment banking arm arranges more than Dhs20bn in sukuk in first half of 2008

Dubai Islamic Bank's (DIB) wholly-owned investment banking arm, Millennium Capital Limited, announced today that it has arranged in excess of Dhs20bn of sukuk and syndication transactions since the beginning of this year.

DIB has risen to second place in the GCC Islamic Bonds League Tables, up from sixth place in 2007, according to the Bloomberg Underwriter Rankings published in June 2008

The largest GCC-based banks such as DIB, the world's first Islamic bank, have seen increasing competition from the leading global investment banking firms for a share in this fast-growing Sharia-compliant market space.

Despite the stiff competition, DIB has successfully managed to further strengthen its leadership position in this sector.

Khaled Kamda, Group Managing Director & CEO, Dubai Islamic Bank, said:


'UAE issuers such as DIB, continue to receive a strong response from the markets. Since the successful Dhs7.5bn closure of the first rated sukuk for the Jebel Ali Free Zone in Dubai in November 2007, DIB has continued to play the lead role in channeling the vast liquidity of the region into the sukuk and syndication market. This channeling has improved asset allocation and provided scale and depth to the domestic capital markets in a very meaningful way.'

Since the beginning of the year, within the UAE, DIB has acted as lead manager, arranger and book runner on over 90% of all sukuk transactions within the market, as well as over 60% of Islamic syndication transactions.

'In addition, DIB is currently executing several significant transactions and expects to successfully conclude these transactions shortly,' said Saad Zaman, Deputy CEO of Millennium Capital Limited. 'The success of DIB's investment banking business is predicated on strong origination, structuring and a distribution track record that has served it well in deepening its already close customer relationships.'

DIB has had many firsts in the sukuk industry, such as the first sukuk with equity warrants, the first convertible sukuk, the first musharaka sukuk, the first sukuk under the EMTN program and the first dirham-denominated sukuk.

The overall suite of investment banking products continues to see strong demand from DIB's client base, according to Zaman.

Increases in outbound cross-border activity have provided DIB with significant business opportunities, focusing in areas such as infrastructure, financial services and real estate.

Building on its asset management platform and the success of its asset-backed funds, DIB plans to continue rolling out new funds.

The Sharia-compliant funds are based in several regions and cover several asset classes, including aviation, shipping and real estate.

Private equity is another area where DIB is keen to expand and create new successes within its investment banking platform.

Recently, DIB and Millennium Capital partnered with Global Investment House of Kuwait to launch a $500m Islamic buyout fund.

Zaman concluded: 'This is the first of an expected series of future private equity funds that will target different asset types and regions to provide investors with a wide range of private equity investment options.'

Dubai Islamic Bank launches two innovative new resources products

Dubai Islamic Bank (DIB) announced today the simultaneous launch of two innovative investment products linked to the fast-growing alternative energy sector.

Launched by DIB's Wealth Management Division, both products are linked to the DWS New Resources Fund, which targets companies active in water, agrochemicals and renewable energies.

The two products are a 10-year non-capital-protected certificate and a five-year capital-protected note. Both products, which are priced in euros with a minimum investment of €10,000, are structured with and issued by Deutsche Bank, and offer biweekly redemption.

These products are the first of their kind in the region, reinforcing DIB's commitment to innovation and socially responsible investment. More specifically, the products give exposure to basic resources, which are coming under increasing strain as the world's population, and therefore consumption, continues to grow rapidly.

For example, demand for potable water is expected to triple over the next 30 years. Similarly, the need for alternative energy sources continues to grow as the supply of fossil fuels fails to keep pace with worldwide demand.

Finally, in an era of rapid population growth and diminishing acreage devoted to farmland, new investment in agrochemicals is vital to ensuring the long-term provision of a wide range of agricultural commodities.

'There is no question that, over the coming decades, the world will change dramatically. How we manage this change will determine the quality of life our children and grandchildren inherit,' said Naveed Ahmad, Head of Investments - Wealth Management, DIB.

'The products, linked to the DWS New Resources Fund, represent a significant opportunity for investors to participate in shaping the future.

'By investing in a range of high-growth industries directly tied to the provision of new and renewable resources, our clients are able to demonstrate their personal commitment to socially responsible investment. At the same time, they can achieve strong returns with a diversified portfolio that is balanced across sectors and geographies.'

'DIB's Wealth Management Division is delighted to mark the start of another year devoted to innovative investment opportunities by launching these two extremely compelling products,' he added. 'Working with our partners at Deutsche Bank, these products have been structured to balance risk across a range of high-growth sectors. We are confident that our clients in the region will seize upon this opportunity to do well - and do good.'

'We are delighted to once again partner with Dubai Islamic Bank and offer innovative investment products to investors in the Middle East. The two new products are benchmarked to the DWS New Resources Fund and have been structured with and without capital protection - to address investors with different risk appetites,' said Magdalena Saine, Head of Equity Derivatives Sales in the Global Markets Group at Deutsche Bank.

'DWS Investments continues to focus on offering innovative investment opportunities for investors across the region,' said Tarek Lotfy, Head of Sales, Deutsche Asset Management, Middle East and North Africa. 'We believe that the shift away from a carbon-based economy is a mega-trend as consumers, investors and companies in all sectors are responding to the challenge of climate change, creating new markets, products and services that represent significant business opportunities.'