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Warba Bank arranges $150m Syndicated Murabaha Facility

Warba Bank has participated in this transaction with a stake of $20m in a consortium of six regional and international banks.

As part of its strategic regional and international expansion plan, Warba Bank announced that it has successfully arranged a $150m, Sharia-complaint syndicated finance facility for the International Bank of Azerbaijan (IBA). The facility has a tenor of one year with a bullet repayment due at maturity.

Warba Bank has participated in this transaction with a stake of $20m in a consortium of six regional and international banks: J.P Morgan Bank, Citigroup, Barwa Bank, Al Hilal Bank, Noor Bank and Dubai Islamic Bank.

The IBA is the largest bank in Azerbaijan, holding 35.6 per cent of the country’s banking sector assets and seizing the biggest share of the financial and banking business there. Given its size and capabilities, IBA is also the first contributor in financing government-backed projects for developing local infrastructure. IBA is also one of the leading banks in the Commonwealth of Independent States formerly part of the Soviet Union and plays a major role in developing Islamic Finance.

In addition to arranging the $150m financing facility for IBA, Warba Bank has also announced its contribution of $15m in an Islamic Sharia-complaint facility amounting $80m arranged by HSBC for the Turkish Ozun Group, one of the largest apparel retail chains in Turkey. The loan will support the development of the DeFacto brand production line for clothes and accessories. The Ozun Group currently owns approximately 260 stores in Turkey and is targeting expansion of its business by entering new regional and international markets, starting with the Middle East region. The loan provided by Warba Bank will be for three years, with average repayment tenure of two years.

On this occasion, Mr. Shaheen Al Ghanem, the Deputy CEO of Warba Bank, commented “We are very excited for completing this transaction. It reaffirms the Bank’s proven strategy of seizing promising investment opportunities in emerging markets, selecting the right partners and then executing successful cross- border deals by providing Sharia-compliant finance solutions to new and diverse customers thus enhancing Warba Bank’s competitive abilities and contributing towards the development of the global Islamic economy”.

Mr. Al Ghanem, continued: “Such transactions are part of Warba Bank’s continuous efforts in expanding its business around the world to avail from favorable developments in the economies of these countries and a part of the geographic diversity and growth of Warba Bank’s investment portfolio by which we aim to achieve valuable gains for our customers and shareholders.”

“Warba Bank continues demonstrating excellence in providing corporate financing services in emerging markets, and will continue to do so by leading and executing innovative Sharia-compliant investments which attain strong returns in both short and medium terms,” Al Ghanem concluded.

Warba Bank previously completed many successful local and regional finance transactions last year, including arranging a $155m syndicated facility for a leading oil and gas company based in the UAE. In addition, Warba Bank has successfully arranged a KD100m syndicated facility for National Industries Group (NIG), in line with the Bank’s efforts to support local economy and local companies.

In addition, Warba Bank has successfully exit from investment projects. The Bank sold its real estate investment in West Bromwich in the United Kingdom achieving net profit of KD640 K.