Unicorn Investment Bank achieves record results

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The strong and diverse mix of operating income led to a 66% growth in net profit, up from $30.1m in 2006 to $50.1m in 2007.

The record results delivered major improvements in the Bank's key profitability and shareholder return measures. Return on equity increased to 17.6% and earnings per share grew by 26% to 29.7 US cents per share. The cost:income ratio of 59.4% remained within the Bank's target range for operational efficiency.

Unicorn achieved many notable business 'firsts' during 2007. In July, the Bank closed a groundbreaking $1bn Sukuk for a Saudi real estate developer Dar Al-Arkan, marking the largest Sukuk to be issued by a Saudi corporate in the international capital markets.

This followed the Dar Al-Arkan $600m inaugural Sukuk issue that closed in February. Unicorn was the Joint Lead Manager, Underwriter and Bookrunner and the sole Structuring Agent and Shari'ah Advisor on both transactions.

In January, Unicorn significantly strengthened its international presence by acquiring a 75% stake in Inter Yatirim Menkul Degerler A.S., a brokerage and asset management company in Turkey with offices in Istanbul and Ankara. Inter Yatirim (now renamed Unicorn Capital) is fully licensed to undertake a broad range of investment banking activities. In December, the Bank increased its stake in Unicorn Capital to 81.8%.

In the first quarter, the Bank exited two of its earliest investments, the Unicorn KSA Real Estate Fund I and the private equity investment in The Gardens Residential Community in the United States.

In the third quarter, a partial distribution to investors was made from the Unicorn Gulf Springs Real Estate Fund. These exits provided investors with strong returns and demonstrated Unicorn's ability to source outstanding investment opportunities and successfully complete the investment cycle.

In September, following two years of intensive research, due diligence and capital raising, Unicorn completed a major business initiative to establish T'azur, an independent regional Takaful company.

The Bank also completed the initial capital raise for the Unicorn Strategic Acquisition Fund, with a select group of investors committing $150m towards Unicorn's target of creating a $1bn fund to take strategic stakes in and manage financial institutions. These two important initiatives represent an integral part of Unicorn's strategy to build a global Islamic investment bank through a combination of organic and inorganic growth.

In December, Unicorn completed two major high-profile private equity investments in the United States: the acquisition of a 75.6% stake in Open-Silicon, Inc., a market leader in chip design and outsourced manufacturing services; and the acquisition of an 80% stake in Victron, Inc., a leading specialty provider of electronics manufacturing services (EMS) based in California.

The Bank also saw strong balance sheet growth in 2007. Total assets grew by 52%, from $293.3m at 31 December 2006 to $446.7m at 31 December 2007.

The growth was mainly funded by increased share capital (up $21.7m) and short-term bank facilities ($70.4m).

The bank facilities represent Unicorn's first steps to leverage its balance sheet to support future business growth. In January 2008, the Bank successfully closed a 3-year syndicated commodity Murabaha facility which was significantly oversubscribed, raising $125m (25% above the launch amount of $100m).

Majid Al-Sayed Bader Al-Refai, Unicorn's Managing Director & Chief Executive Officer, commented: 'Thanks to Allah's grace, Unicorn made significant strides towards fulfilling its strategic vision in 2007. We continue to push back the boundaries of Islamic investment banking and complete groundbreaking transactions. All of our five business lines contributed to the bottom line in 2007 as we diversified our income streams and made further progress towards fulfilling our global strategy. Unicorn has been profitable since its first year of operation in 2004 and we now have a presence in five countries across three continents.'