BMA grants new licence to Gulf Finance House

The new subsidiary, which will be set up with a capital of US$80 million, will offer financing and investment products, based on Islamic principles and related specifically to real estate.

The new licence was recently approved by HH the Prime Minister and Chairman of the BMA Board, Shaikh Khalifa Bin Salman Al Khalifa.

GFH currently operates as an Islamic investment bank, with a paid up capital of US$65 million.

The bank will raise its capital to US$135 million through a rights issue for existing shareholders and a private placement.

Current GFH shareholders are Kuwait Finance House, Dubai Islamic Bank, Bahrain Islamic Bank, Qatar Islamic Bank, Gulf Investment House, Islamic Development Bank, Aref Investments Group, the Saudi Economic and Development Company (SEDECO) and other institutional and individual investors.

New shareholders include General Pension and Social Security Authority of the UAE, Kuwait Investments Company, Global Investment House, Al Shayie Group, Al Zamil Group, Al Babtin Group, besides other institutional and individual investors.

"We welcome the initiative of Gulf Finance House to set up a full fledged subsidiary specializing in real estate business," said Mr. Ahmed Al Bassam, Director, Licensing & Policy, at the BMA.

The new venture will undertake a wide range of real estate banking activities, such as retail and project financing, direct investments and investment planning, venture capital, structured finance and syndication, asset management, property management and financial advisory services.

"Financial services are becoming increasingly integrated and financial institutions need to explore new market opportunities and diversify into additional business areas," said Mr. Al Bassam.

"In Bahrain, we are seeing the emergence or growth of new types of activities, such as leasing, wealth management, financial broking, captive insurance and outsourcing."

Bahrain is the ideal base for financial institutions wishing to do business in the Middle East region or those wishing to diversify and expand existing operations, he noted.

"As always, BMA stands ready to modify, upgrade or develop new licenses and regulations to ensure the appropriate infrastructure for conducting existing or new financial activities," said Mr. Al Bassam.