Ithmaar profits soar

Ithmaar Bank, a Bahrain-based investment bank with global reach, posted a 115 per cent surge in its half year net profit to a record $141.9 million, up from $65.9 million for the same period last year.

As Ithmaar Bank's subsidiaries and associates continued their upward trend, operating profits nearly doubled from $71.1 million for the first half of 2007 to $139 million for the period ended June 30, 2008. Return on equity (annualised) remained strong at 21 per cent. These results reflect the bank's strongest mid-year financial performance since it went public in early 2006.

"Ithmaar Bank's robust half year financial performance is a result of the management's strategy to consolidate the group's strengths over the past six months.

"Our confidence and willingness to pioneer unique investment opportunities has been recognised by the markets in the region, which have witnessed us forge inroads into previously unchartered territories this year," said Khalid Abdulla-Janahi, chairman, Ithmaar Bank.

"Our financial results clearly show that we have bucked the trend as the financial industry around the world continues to struggle with the ripple effects of the sub prime crisis and rising inflationary pressures.

"The bank's results were buoyed by our involvement in several high-profile transactions over the first half of the year. In June, the bank played a major role in the launch of Naseej BSC (under formation), a BD2 billion fully-integrated infrastructure and real estate development company and the first company of its kind in the region.

"Naseej highlights the commitment of the founding institutional shareholders to the local community and its launch provides a boost to Bahrain's construction and real estate sector, ensuring price stability and competitiveness in an industry currently plagued by supply shortages and delays," he said.

"Our development arm, Ithmaar Development Company, continued to make strides in implementing its real estate project portfolio. Its flagship development, the $1.6 billion Dilmunia 'health island' project, is on track, with reclamation work already well underway. This Ithmaar Development Company mega project will put Bahrain firmly on the global map and create new avenues for investment in the Middle East's burgeoning healthcare industry," said Mr Janahi.

"The bank's remarkable performance for the first half of this year comes as a result of the hard work of our people and the management's commitment to our vision to become the leading international investment bank operating globally from the Middle East," said Michael P Lee, CEO and member of the board of Ithmaar Bank.

"Ithmaar banking group has launched three landmark funds during the first six months of the year. In May, Ithmaar Development Company, Ithmaar Bank's wholly owned subsidiary, launched a $500 million Sharia-compliant real estate fund targeting income generating assets in Latin America. In May too, and on the occasion of the World Economic Forum in Sharm Al Sheikh (which was co-chaired by our Chairman, Khalid Abdulla-Janahi), Ithmaar Bank also announced the launch of the targeted $1 billion Ithmaar Kazyna CIS Energy Fund in co-operation with the government of Kazakhstan.

"The private equity fund is expected to act as a catalyst for capital investment of up to $10 billion," said Mr Lee.

"As one of the first investment banks from the Middle East to enter previously untapped markets like Kazakhstan, Ithmaar Bank is setting the bar for developing global innovative investments that deliver high returns to our investors," he said.

"Another of Ithmaar Bank's wholly owned subsidiaries, Shamil Bank, launched in May a Euro 150 million Sharia-compliant fund focused on real estate assets in Central and Eastern Europe.

"This fund has attracted strong interest among investors within the region and in Europe too," added Mr Lee.

Income from investments contributed $139 million, income from financing contributed $91 million, while $28.8 million was collected in fees and commissions.

Total assets showed significant growth of 14.4 per cent, totalling $4.7 billion at the end of June 2008, compared with $4.1 billion as of December 31, 2007.

Despite the bank's rapid expansion into new markets, the cost-to-income ratio remained low at 37 per cent. Funds under management surged 29 per cent, from $1.7 billion to $2.2 billion.

"Ithmaar Bank's subsidiaries and associates have continued to show positive growth for the first half of the year. Ithmaar's associate, Ithraa Capital, has received a full investment company licence from the Kingdom of Saudi Arabia's Capital Markets Authority.

"Ithmaar has further increased its stake in BBK to 24.4 per cent and this will enable us to consolidate our strengths in the Middle East and South Asia region, further accelerating the Bank's overall growth," said Mohammed Hussain, co-CEO and member of the board of Ithmaar Bank.