Gulf Finance House launches Islamic commercial bank

The BMA issued the license for GFHCB on December 6th 2004. The new bank, which has been established with a capital of US $80 million, will undertake a wide range of real estate banking activities, including project financing, direct investment, structured finance and syndication, asset management, property management and advisory services.

The new banking entity, which is now fully operational, will broaden and deepen GFH's client base in the Kingdom by allowing GFH to offer a range of investment opportunities to Bahraini residents.

Detailing the strategy behind the new bank, at a press conference organised on the sidelines of the World Islamic Banking Conference currently being held in Bahrain, Dr. Fuad Al Omar, Chairman of Gulf Finance House B.S.C ( c ), said: "Since its inception five years ago, GFH has come to be regarded as one of the region's most successful Islamic investment banks. The bank's strategy, which is primarily aimed at pursuing superior investment opportunities in an increasingly value-driven business environment, has yielded high-returns for both its shareholders as well as investors in its various highly successful investment products."

Elaborating on the real-estate focus of the new bank, Dr. Al Omar added: "Real Estate values in Bahrain have risen by an average of 7.4 per cent per annum over the last 5 years as compared to a 6.1 per cent growth in bank lending to this sector. We feel that there are huge opportunities for strategic investment and financing, especially with several substantial projects in the pipeline.

As a niche Islamic bank, GFHCB is strategically positioned to take advantage of the dynamic growth in property markets by offering unique investment products to high net worth individuals in Bahrain. The bank will further distinguish itself by offering a range of highly innovative, short to medium term Islamic investment products that offer high returns to investors. In addition, the bank will also offer personalized services such as wealth management and other advisory services.

Addressing the press conference, Mr. Esam Janahi, Chief Executive Officer, GFH, and Vice Chairman of GFHCB, said: "Through the commercial bank's property funds, all Bahrain residents will now be able to invest in GFH projects in Bahrain, such as Bahrain Financial Harbour and the Al Areen Desert Spa & Resort, as well as in other parts of the region, that were previously restricted to foreign investors."

Mr. Janahi further added: "A lack of investment and credit opportunities has hampered the growth of Islamic commercial banks in the region. GFH will use its deep understanding of the regional real estate sector and its proven track record in identifying superior investment opportunities to forge a strong value proposition for clients of the new commercial bank. Simultaneously, the bank will also take advantage of the yields available in the real estate market to offer higher yields to short to medium term investors."

Speaking on the occasion of the launch, Mr. Ebrahim Hussain Ebrahim, General Manager of GFHCB said: "The commercial bank will attract funds from high net worth individuals and financial institutions in Bahrain. It will also work closely with the large pool of property developers, landowners and investors across the region. Also on the agenda, are alliances to be forged with Islamic banks, large property developers and real estate agents to source investment and financing opportunities."

"Given its dedicated real estate focus, the bank will provide dedicated services to all parties involved in the region's booming real estate sector," he added.

Elaborating on the range of banking products to be offered by the new bank, Mr. Ebrahim said: "To begin with, the new commercial bank will offer products in three broad categories. These include short-term fixed investments, property based investment funds and Murabaha and Ijara financing for residential and commercial property, besides also offering bridge financing. Over time, the bank will diversify its product portfolio to include leasing funds and equity funds.

The board of GFHCB brings together expertise from the region's leading financial institutions. In addition to Dr Fuad Al Omar and Mr. Esam Janahi, members on the board of GFH Commercial Bank include Mr. Buti Al-Flasi, UAE national and Chief Executive Officer of Dubai Islamic Bank, Mr. Abdul Latif Al-Meer, Qatari national and AGM Investment Planning of Qatar Islamic Bank, Mr. Mohammed Al-Alloush, Kuwaiti national and Chairman and Managing Director of First Investment and Vice Chairman of Bubayan Bank, Mr. Yousif Khayat, Saudi national and Managing Director of Direct Investment Group and Saudi Economic and Development Co (SEDCO) and Mr. Samir Al-Nafisi, Kuwaiti national and Vice Chairman of Kuwait Finance House.