Growing demand for Shariah compliant solutions spurs First Gulf Bank’s acquisition of Aseel Finance - IFN

Growing demand for Shariah compliant solutions spurs First Gulf Bank’s acquisition of Aseel Finance

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UAE: Abu Dhabi-based First Gulf Bank (FGB) has increased its 40% stake in Shariah compliant financing company Aseel Finance (Aseel), which is also based in the UAE, to 100%. The bank bought over stakes held by Aldar Properties, Sorouh Real Estate and Reem Investments which totaled to 60% in a bid to convert Aseel, which has a paid-up capital of AED800 million (US$217.8 million) and AED1.5 billion (US$408.38 million)-worth of assets, into its Islamic banking and finance arm. Aseel is expected to maintain the current lineup for its board of directors, headed by Hana Al Rostamani, who was elected as chairperson of the board in 2012. She is also currently the head of strategic planning at FGB, and is responsible for developing the bank’s strategic direction in the corporate, retail, investment, Islamic and international banking sectors as well as involved in organizational change and transformation initiatives. FGB already has an existing suite of Islamic consumer banking products under its Siraj Islamic Banking brand and as the new Islamic subsidiary of FGB, Aseel will provide a range of Shariah compliant financing solutions to include business financing, Murabahah and Ijarah products for SMEs, Takaful and investment products, corporate deposits and trade facilities alongside its real estate services. Under its previous setup as a private joint stock company, Aseel provided Shariah compliant corporate finance and home financing products. The new agreement will also see Aseel manage FGB’s Emirati Al Awwal Islamic savings certificates program which is exclusive to those from the UAE. According to Andre Sayegh, CEO of FGB, the acquisition of Aseel will allow the bank to build on its current Islamic product portfolio in response to the growing demand for Shariah compliant products in the UAE. According to the bank’s unaudited financial statement for the first half of 2013, ended on the 30th June, FGB’s total assets stood at AED182.92 billion (US$49.8 billion) while its total equity stood at AED29.2 billion (US$7.94 billion). The bank, which is said to be planning to continue its expansion drive into Asia, made investments worth AED7.94 billion (US$2.16 billion) outside the UAE, while investments within the UAE stood at AED8.82 billion (US$2.4 billion) for the same period. The bank currently holds a 100% stake in UAE-based Mismak Properties, a real estate investment firm; an 80% stake in Radman Properties, a subsidiary of Mismak; and a 100% stake each in First Gulf Properties, First Merchant International and FGB Sukuk Company I and II incorporated in the Cayman Islands. It also holds a 50% stake in First Gulf Libyan Bank. In August 2011, FGB issued a US$650 million Sukuk maturing in August 2016 and subsequently issued the second tranche of its Islamic trust certificates program worth US$500 million in January last year. Both papers are listed on the London Stock Exchange.