2006 Half Year Results September 2006Presentation Transcript
2006 Half Year Results September 2006
EIIB – A Brief History
Jan 2005 Company established
Q2 2005 Private placement raised approximately £108 million (net)
Mar 2006 FSA authorisation received
Apr 2006 Commenced trading
May 2006 AIM IPO raised approximately £72.8 million (net )
Sept 2006 Moved to AIM 100 Index
First Islamic investment bank licensed by the FSA
Revenues have increased to £3,019,424 (2005:£1,062,973)
Operating profits of £184,359 (2005: £547,730)
Total capital now £184m – better capitalised than most Islamic Banks
Key business heads and teams in place. Roll-out remains on track versus IPO timetable
Treasury & Capital Markets; Asset Management; Trade Finance business lines set up and developing traction – asset acquisition, structuring capability
Operating Infrastructure and banking platform is in place.
Developing traction with Shareholders, client, market counterparties
Deal pipeline developing
Nearing successful completion of “Start-up” phase
Strategy and Business
Become a major participant in Islamic financial markets
Roll-out a broadly-based business model with a wide product range:
Treasury and Capital Markets (incl Structured Trade Finance)
Asset Management, including Private Banking
Corporate Finance and advisory
Target investment banking clients across Europe, Middle East and Asia
Develop and grow liquidity within the Islamic Capital Markets
Innovate and distribute new structures and asset classes
Leverage UK presence to develop partnerships with other Islamic and European Institutions for:
White-labelling Sharia’a products
We believe our model is differentiated from other Islamic banks.
Delivering the Business Plan
Treasury and Capital Markets
Danie Marx appointed head of Treasury and Capital Markets in January 2006
Team of 6 hired offering treasury, risk management, debt capital market (vanilla and structured) and structured trade finance solutions
Capabilities now include - Foreign exchange, profit rate hedging, money markets, term financing, securities origination, underwriting, structuring, distribution and sales, and asset securitisation – developing derivatives capabilities
Since April 2006 committed to 2 primary market Sukuks and 3 secondary market Sukuks including 1 st Islamic Mortgage Securitisation
1 st Islamic Investment bank to quote 2 way prices in selected Sukuks in London
Market environment and opportunity remain highly positive
Focus is on building sustainable fee income from an Investment Banking and Asset Management business
Establishing office in Bahrain with a top-tier team to originate and distribute transactions in Gulf is a priority
Develop product offerings that are innovative and offer our investors the opportunity to build a diversified portfolio
Continue to source and recruit quality staff required to grow the business
Launch 3 products and complete 2 deals by year end
Obtain rating and complete listings
EIIB continues to have 1 st Mover advantage allowing it to develop brand presence and leverage its competitive niche
On track to meet market expectations
Appendix 1 : Organisational Structure Teams are in place, charters of committees ensure oversight and independence
Appendix 2: Board of Directors
Adnan Ahmed Yousif, Non-Executive Director and Chairman , is also CEO and Board Member of AlBaraka Banking Group.
Khalid Abdulla Al-Bassam, Non-Executive Director, Deputy Chairman and Chairman of the Nomination Committee , is Chairman of Al Bassam Investment Co., and Chairman, Bahrain Islamic Bank and prior to this, Deputy Governor of Bahrain Monetary Agency.
John Weguelin, Executive Director and Managing Director , has over 30 years banking experience, was Managing Director of Bank of America Securities Limited in London and COO and Chief Administration Officer of Bank of America NA for Europe, Middle East and Africa
Atif Raza, Executive Director and Chief Operating Officer and Finance Director, was previously with Unicorn Investment Bank in Bahrain, where he was the Chief Financial Officer. Prior to that he was CFO for Citicards UK, a Citigroup entity and SAMBA.
George Morton, Senior Non-Executive Director , was previously Senior Vice President and Head of International Division at Arab Banking Corporation (BSC), Bahrain
Appendix 2: Board of Director cont/…
Shabir Ahmed Randeree, Non-Executive Director and Chairman of the Remuneration Committee , is also Managing Director of DCD London & Mutual PLC and a Non-Executive Director of Islamic Bank of Britain Plc.
Hatem Abou Said, Non-Executive Director , is also a member of the Board of Directors of the Italo-Arab Chamber of Commerce. His international, investment and commercial banking experience spans more than 40 years and was awarded the honorary title of Cavaliere al Merito della Repubblica Italiana (Knight of the Order of Merit of the Italian Republic) by the President of Italy, in recognition of his service to the national economy.
Yusef Abu Khadra, Non-Executive Directors, was previously a member of the Management Committee of Investcorp Bank E.C. in Bahrain and latterly an Executive Director of Investcorp Securities in London
John Clouting, Non- Executive Director and Chairman of the Board Executive Committee , and is also a non-executive Director of Turkish Bank (UK) Limited. He was General Manager of Jordan International Bank Plc and General Manager of Turkish Bank (UK)
Salman A Abbasi, Non-Executive Director , was General Manager of Investcorp Bahrain until 2004. Prior to that, he was Vice President & CEO responsible for all Chase Manhattan Bank NA’s business in Africa and the Middle East
Aabed Alzeera, Non-Executive Director, is a prominent Bahraini banker and Chief Executive Officer of International Investment Bank (IIB). Previously Aabed held senior positions with American Express Banking Corporation and Arab Banking Corporation (ABC)
Appendix 3: Sharia’a Supervisory Board
Justice (rtd.) Muhammad Taqi Usmani, Chairman was a member of the Sharia’a Cassation Board at the Supreme Court of Pakistan from 1982-2002. He has also been Chairman of the Sharia’a Board of Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) and a former Chairman of the Sharia’a Board of Islamic Bank of Britain Plc and sits on a number of Sharia’a boards of other institutions.
Dr Abdul Sattar Abu Ghuddah has taught at various institutes, including the Imam Al Da’awa Institute in Riyadh and the Sharia’a College and Law faculty in Kuwait University. He is Secretary General of the Unified Sharia’a Supervisory Board of Dallah Albaraka Group in Jeddah and a member of the Sharia’a board of AAOIFI.
Dr Abdul Latif Mahmood Al Mahmood has been Head of Arabic Language and Islamic Studies Department at the University of Bahrain from September 2001 to September 2005 and Assistant Professor for Islamic Studies since 1985. He is a member of the Board of Trustees of the International Union for Muslim Scholars. He is head of a number of Sharia’a boards including the Bahrain Islamic Bank (BSC) and Lebanon Islamic Bank.
Sheikh Nizam Muhammad Seleh Yacouby is a member of a number of Sharia’a Supervisory Boards, including the Dow Jones Islamic Index, Bahrain Islamic Bank and Citi Islamic Investment Bank. He is also a member of the Sharia’a board of AAOIFI, a member of the Sharia’a Board of Islamic Bank of Britain Plc and has been a visiting lecturer at Harvard
Appendix 4: Management Team
John Weguelin, Managing Director. John has over 30 years’ banking experience. Until 2003, he was Managing Director of Bank of America Securities Limited in London, and Chief Operating Officer and Chief Administration Officer of Bank of America NA for Europe, Middle East and Africa
Atif Raza, Finance Director and Chief Operating Officer . Atif is a UK qualified chartered accountant with over 20 years experience in public accounting and senior leadership positions in chief financial officer roles in international financial institutions in the UK and Middle East. Atif was previously with Unicorn Investment bank in Bahrain, where he was the Chief Financial Officer. Prior to that he was CFO for Citicards UK, a Citigroup entity and CFO for Saudi American Bank (SAMBA) in Saudi Arabia. He was a director of UIB Capital Sdn. Bhd., Malaysia until November 2005.
Mohaimin Chowdhury, Head of Legal, Sharia’a and Compliance and Company Secretary. Mohaimin is a solicitor qualified in England and Wales and joined EIIB in June 2005 from Dubai Islamic Bank where he was Legal Advisor. Prior to that, he was Legal Advisor in the Legal and Sharia’a Compliance Department of Abu Dhabi Islamic Bank from October 2000 to July 2004. Mohaimin started his legal career in private practice in London where he worked for 4 years after qualification.
Danie Marx, Head of Treasury and Capital Markets. Prior to joining EIIB he was Treasurer and Head of Capital Markets at Absa Bank Limited’s London branch. Until 2000 he was tasked with structured solutioning at Absa’s Head Office in Johannesburg, South Africa. Before that, Danie was at Standard Bank of South Africa
Jeremy Beswick, Head of Asset Management . Jeremy joined EIIB from RMB MultiManagers, which is the London-based international investment management arm of FirstRand Group. Before this, Jeremy spent seven years with US mutual fund company MFS. He established and launched its operations in Europe, and was Managing Director (Europe). From 1999 to 2002, he was seconded to MFS’s owner Sun Life of Canada, to become CEO of India’s second-largest mutual fund company, Birla Sun Life AMC.
Grant Lowe, Head of Risk Management . Prior to joining EIIB Grant consulted at the Bank Supervision Department of the South African Reserve Bank, specialising in counterparty and position risk management. Before joining the Central Bank, Grant was the Head of Risk at Citibank Johannesburg Branch, and prior to that he was a Senior Credit Officer with Bank of America London Branch and Standard Bank London Plc.
Tara McCabe, Head of HR . Tara has approximately 10 years experience in Human Resources, and joins EIIB from the General Council of the Bar, England & Wales where she was the Human Resources Manager. Prior to this Tara worked as an HR contractor for 5 years in various start-up and restructure projects in telecommunications, PPI’s, Investment Banking and Asset Management.
Appendix 4: Management Team Cont/…
Appendix 5: Market Opportunity
Significant growth in Islamic banking
1.4bn Muslims – 24% of world population
88.5% Muslims (incl Turkey) – 20% EU population
Global assets estimated at approximately $700bn
Deposits of approx $200bn
Global Sukuk market + $41bn
$82bn outstanding in Commodity Murabaha
$3bn pd: traded in London
Total of HNW wealth in ME - £1.3 trillion, 70% GCC
Increased demand for Sharia’a compliant investment products
Significant opportunity to bring higher-yielding Islamically structured assets to the EU market place
Islamic Finance market continues to record robust growth.
Appendix 6: Market Environment
Macro-economic environment in ME remains very positive with oil prices at record levels generating surplus liquidity in region: 74% growth in the last 3 years
Strong investor appetite for European and OECD assets supports EIIB’s positioning to intermediate EU Capital markets and ME liquidity
Six GCC countries estimated to generate over $220bn surplus in ’06 and ’07
GCC economies will remain in surplus based on current spending plans, even if oil prices fall to $40
Non energy sector is growing faster – 8% in 2006 - than the Oil & Gas sector
GCC countries are expected to accumulate foreign assets almost as rapidly as China will add to its FX reserves
Bulk of capital flows are expected to be used to finance portfolio investment.
Estimated in excess of $1,000bn of infrastructure investment over next 5-10 years
Appendix 7: Islamic Finance developments
Islamic banking heading for 20% of total banking assets – growing at 10-15% pa
GCC banks continue to report solid performance
Most major Islamic banks investing resources directed at becoming regional players. Smaller banks looking to expand footprint and size through overseas expansion
Malaysian Islamic banking deposits reached £10.7bn while Islamic banking is now 12% of total system. 44% of bonds being issued are Islamically structured