BBK launches Islamic investment banking arm

By Andy Sambidge

The Bank of Bahrain and Kuwait (BBK) has announced the launch of Capinnova Investment Bank, its Shari’a compliant investment banking arm.

A wholesale Islamic investment bank, Capinnova is licensed by the Central Bank of Bahrain and has an authorised capital of $500 million and paid-up capital of $125 million.

Capinnova’s chairman A. Karim Bucheery said: “The growth of Islamic banking industry in particular has been remarkable in recent years and it is expect to reach$4 trillion in the next five years according to the recent Standard and Poor rating agency.

"Capinnova Investment Bank aims to leverage on this exponential growth and further strengthen the Islamic Banking industry in Bahrain and across the region."

Capinnova’s core areas of business will include private equity, asset management and corporate finance.

“Capinnova’s vision is to be a world class Islamic investment bank offering a range of high quality products and services to a diverse clientele,” added Capinnova’s CEO Jamal Hijres.

Capinnova will provide a variety of products, including murabaha, ijara, mudaraba, musharaka, al Salam and istitsna'a, restricted and unrestricted investment accounts, syndications and other structures used in conventional finance, which have been appropriately modified to comply with Shari’a principles.

In recent years, Bahrain has rapidly become a global leader in Islamic banking, playing host to the largest concentration of Islamic financial institutions in the Middle East.

In addition, Bahrain is at the forefront in the market for Islamic securities (Sukuk), including short-term Government Sukuk as well as leasing securities.

Qatar Real Estate in $275mn Islamic financing deal

by Lin Noueihed
Qatar National Bank's Islamic branch and Qatar International Islamic Bank signed on Tuesday a 1 billion riyal ($275 million) Islamic financing deal with Qatar Real Estate Investment Co.
They said in a statement the funds would go to future Qatar Real Estate developments in the Gulf Arab country, which is the world's biggest exporter of liquefied natural gas, estimated to be worth 2.5 billion riyals.

The announcement of the Islamic financing or ijara deal comes at a time when real estate developers in the nearby United Arab Emirates scale back major projects as the global financial crisis freezes credit lines and hits demand.
Some analysts have said that Islamic financing could receive a boost as conventional credit markets suffer, because Islam bans interest and favours revenue derived from underlying physical assets.

QNB Al Islami will contribute 700 million riyals and Qatar International Islamic 300 million in the deal which comes into effect in January.

QNB Al Islami was previously mandated to lead arrange an Islamic finance deal worth 1.37 billion riyals for Qatar Real Estate, which was Qatar's first corporate sukuk and used to fund property projects in Qatar.

Qatar Real Estate said in February it planned to borrow funds by the third quarter, possibly by selling Islamic bonds, to finance up to 3 billion riyals of projects.

The government of Qatar owns 27 percent of Qatar Real Estate. (Reuters)