NCB launches a 100 per cent local innovative investment fund

The fund is classified by the bank as a local investment support project with a full capital investment within the local market to purchase residential and commercial properties leased to high credit companies in the cities of Riyadh, Jubail and Yanbu.

The investment fund has been established in collaboration with the Al Zakri Real Estate Construction Group based on the agreement signed by the Bank and Al Zakari group during Ramadan 1424H. NCB forecasts indicate that the economic recovery in the industrial cities, together with the population growth in the Kingdom, will result in an increase in real estate value and growth of local liquidity that will provide a good stimulus to the success of the fund which is categorized as medium to long term investment.

In respect of Fund objectives, Mr. Abdulhadi Shayef, NCB General Manager stated, "This fund will provide a return on investment that is competitive with what is available in the Saudi real estate income market, with an expected net profit of 6.1% annually with a possibility of providing capital gains through real estate properties liquidation at the end of the fund term, which is six years and a half. The fund will also provide semi-annual cash flow not exceeding 20% of each investor's subscription."

"The fund has been approved by Shariah Advisory Committee and invests in accordance with Islamic Shariah Investment Principles, with minimum subscription of SR 100,000. The National Commercial Bank has set a subscription period of one month beginning from the 16th of Dhul Hijjah 1424H corresponding to the 7th of February 2004," Shayef indicated.

"The development of such a concept complies with the strategy of the National Commercial Bank, that is to play a major role in the growth of local investment funds in the Kingdom. This fund opens vast opportunities for investors and NCB clients, to participate and benefit from the prosperity and success of the Kingdom's real estate market," he concluded.

In fact, NCB is the first bank to develop mutual funds for investors in the Kingdom of Saudi Arabia when it launched the first investment fund in the Kingdom 25 years ago in 1979. With a market share of 43% in local investment funds, the National Commercial Bank retains its leadership among all Saudi banks.

NCB received a number of awards during the year 2003 for the unique role it has played in various sectors. The bank won the 2003 Euromoney award as best at Islamic asset management House in recognition of its offering and innovating Islamic and financial products. Also, NCB won the 2003 award as the Best Islamic Fund Manager Worldwide during the recent Islamic Finance and Investment Conference held in South Africa.