Ithmaar Bank to implement 3 major projects worth USD2 billion

The three projects are Sarai Group, a Health Island and the development of Al Jazaer Beach. These projects will be implemented in different areas of the Kingdom of Bahrain with the participation of a number of strategic partners from Bahrain and abroad.

Mr. Janahi said the Board of Directors, as part of its policy of benefiting from specialists and professionals, has decided to expand its membership by adding a new independent member, whose name will be announced soon.

The news was announced during an introductory meeting held on last Thursday between the Board of Directors and a number of investors, analysts, brokers, government officials, economists, senior bankers and representatives from the Bahrain Stock Exchange.

Mr. Janahi emphasized that the Bank, through these projects, aimed at strengthening and consolidating its investment base in different sectors in the Kingdom of Bahrain in order to achieve high growth in the national economy and the gross domestic product (GDP).

Mr. Janahi said that the Board of Directors has taken a number of steps towards the implementation of the projects, and that these measures will be announced at a later stage. He said the Bank has declared good results for the first half of the year 2006, by posting a record profit of $ 33.2 million, an increase of 104%. He said the figure accounts for more than 90% of the 2005 full results, which stood at $ 36.5 million, and more than double the profit of the first half of 2005, which totaled $ 16.3 million. Return on equity (ROE) stood at 14.8%, while return on assets (ROA) was 10.4%. Operating profit rose to $ 19.1 million during the first half of 2006, against $ 4.5 million for the same period of last year. At the same time, shareholders' equity stood at $ 646.7 million, against $ 252 million by the end of June 2005, while total assets rose to $ 830 million by June-2006 end, compared to $ 442.4 million for the corresponding period lf last year.

Mr. Khalid Janahi said that these excellent results are a strong indication of the major progress made by the Bank, particularly after completing a number of major deals, such as the sale of the Islamic Investment Company of the Gulf for $ 150 million. The deal has enabled Ithmaar bank to make a capital profit of $ 104 million, which will reflect positively on the Bank's profits at the end of the current year. The transaction has also contributed to the rise in the book value of the Bank's share by about $ 0.29 to stand at $ 2.07.

The Chairman of Ithmaar Board of Directors predicted that according to the positive indicators, the Bank will achieve excellent profits by the end of this year, ranging between $ 165 million and $ 185 million, while the Bank's assets will rise to around $ 4.5 billion. He noted that the share book value now stands at $ 2.11 million, which is a positive indicator of the performance of Ithmaar bank shares in view of the positive results posted.

Khalid Janahi said the three projects which would be carried out by Ithmaar next year in Bahrain include the development of Al Jazair Beach, wherein $ 800 million will be invested in co-operation with the Bahrain Development Board.

The Al Jazair beach project, estimated at a cost of US$800 million, will be implemented in partnership with the Economic Development Board (EDB). The project involves the creation of a world-class leisure and family tourism facility for the public.

Commenting more on the project, Khalid Janahi said: "The tourist project with all facilities and amenities, will be developed in the area adjoining the Al Jazair Beach, located in the South-West of Manama. He stressed that the project will not just be for the elite, but for the public from all income groups. He said that there will be no NIP rather all will be VIPs. Our Bank and its management believe that people are important and they deserve to be provided with excellent services." He explained that the services provided would be of different standards to suit the tastes and buying power of different socio-economic strata and that each and every potential investor will be important for the management.

He emphasized that the Board of Directors, in co-operation with the Economic Development Board, is keen to keep the Al Jazair Beach a public beach visited and frequented by citizens and tourists. The strip running parallel to the beach will be a walkway overlooking shops and outlets catering to the visitors. The facilities will be available to all.

Mr. Janahi added that the project aimed at providing tourism services suitable for the Bahraini families. The aim is also to help the Kingdom develop as a major tourism hub in the region attracting in-bound tourism mainly from the GCC countries. He said that family-oriented tourism will be encouraged among Bahraini families and different entertainment and recreation facilities will be provided suiting all ages to attract all members of the family.

Mr. Janahi said that the Bank is keen on having the project provide excellent services meeting the expectations of the visitors and tourists from Bahrain and outside. He highlighted the economic importance of the project for the Kingdom in terms of enhancing its status as a major tourism hub in the region. He noted that the Bank will also attract foreign investments in the project.

With respect to the Health Island, in which investments totaling around $ 1 billion will be committed, Mr. Janahi said the Bank is currently examining the details and modalities of the project, and that details will be announced soon. The project will incorporate a health resort containing specialist hospitals and hotels, which will be built using unique engineering and architecture and developing a breathtaking landscape.

Khalid Janahi also commented on the Sarai Project and said: "The US $ 175 million project will consist of a twin-tower in the Seef District, one being a hotel and the other an office tower."

He added: "Construction work on the first multi-purpose hotel which is the first major project in the Seef Commercial District of Bahrain, will begin next year." He noted that the hotel will be part of a group of three different classes of hotels inside and outside of Bahrain."
Mr. Janahi said that the new hotel, which will maintain Islamic values in the conduct of its business, is the result of an in-depth economic study conducted on Bahrain and the region which showed that the region is in need of such luxury family hotels. He said that demand for such of hotels would exceed all expectations, and that is why Ithmaar Bank and Abraj Capital would launch Sarai Hotel Group to reflect the Islamic lifestyle in the region that would meet the requirements of Arab and non-Arab international guests.

He added that the economic and feasibility studies conducted by the Bank and Abraj Capital, which is one of the major investment companies in private equity in the Middle East, North Africa and South Asia, showed that the region requires luxury hotels catering to family tourism in Bahrain and the Arabian Gulf region.

He said that the joint project in which Ithmaar Bank would take part, shows the Bank's keenness to implement a number of projects in different economic sectors in Bahrain and the region.

He added: "Ithmaar Bank has clear-cut plans to increase its capital participation together with strategic partners or new partners in such projects to boost the economic growth of the country."

Ithmaar Bank B.S.C. is a full service investment bank with operations spanning the Middle East, North Africa, Asia and Europe. The Bank holds significant investments in the banking and financial services sector in the GCC and other regional markets. The main activities of the Bank include underwriting (equity and Sukuk), private equity (structuring, participation and portfolio management), project financing and advisory (capital markets, merger & acquisitions and project advisory).

One of the most important affiliates of the Bank is Solidarity B.S.C., which provides general Takaful and family services, Faisal Bank Limited (Pakistan) which provides commercial banking and retail banking services and Faisal Private Bank (Switzerland), which provides wealth management and investment banking services.