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Bahrain-based Ithmaar Bank plans to add more than 100 branches in Pakistan this year through its subsidiary Faysal Bank. Ithmaar's deputy CEO Abdul Hakeem al-Mutawa says banking penetration is less than 20% in Pakistan, so there are good opportunities to grow. Ithmaar Bank's parent company, Ithmaar Holding, listed recently on the Dubai Financial Market. Al-Mutawa believes the company is well established now to approach the capital markets and the bank has no imminent plans to raise funds through a bond or loan. Ithmaar Holding is also exploring the sale of its 25.4% stake in Bahrain's BBK, which has operations in Bahrain, Kuwait, India and Dubai. Al-Mutawa declined to comment on the timeframe for the disposal of the BBK stake.

In this interview, Ahmed Abdul Rahim talks about Ithmaar Bank’s recent performance, the global Islamic banking industry and the increasing use of technology in banking. Ithmaar Bank is now entirely focused on retail banking and is considered one of the biggest Islamic retail banks in Bahrain. The waiting period at the branches has been reduced and the customer is provided various delivery channels for services like call center, Internet banking, EasyPay and mobile banking. EasyPay is the first-of-its-kind mobile-payment service in Bahrain. The service enables customers to shop simply by tapping their mobile phones at the checkout counters of participating merchants. As a pioneering Islamic retail bank, Ithmaar ensures that all its products and services are compliant with Islamic Sharia rules and that business is conducted accordingly.

In #Pakistan Faisal Private Bureau (FPB) has transferred its entire shareholding in Faysal Bank Limited (FYBL) to Ithmaar Bank. On June 30 FPB has transferred over 38.686 million of its stakes in Faisal Bank into Ithmaar's CDC account. However, FYBL secretary Aurangzeb Amin said the transaction had no affect in terms of change of ownership. He also added that the State Bank of Pakistan had already granted its approval for transfer of shares to Ithmaar Bank on April 29, 2016.

Shareholders with Bahrain-based Ithmaar Bank recently approved of the new group structure plans that will help the core retail banking business grow along with the bank’s strategic focus. The new plans were part of a proposal from the bank's board of directors and are still subject to approvals and further changes. The new structure will better allow the bank to compete with the global market. Ithmaar Bank Chairman Prince Amr Al Faisal said this new group structure will help lower the risk profile of the new banking entity and enhance shareholder value.

Bahrain-based Ithmaar Bank has announced that its retail banking subsidiary in Pakistan, Faysal Bank Limited, has registered a record profit for 2015. Faysal Bank registered a profit, after tax, of US$ 41mn (PKR 4.2bn) during 2015, a 70 percent increase over the profit reported for 2014. During the year, the bank's operating income increased by 95 percent, growing from US$ 35mn (PKR 3.5bn) in 2014 to US$ 67mn (PKR 6.9bn) in 2015. Total assets increased by 11 percent to US$ 4bn (PKR 430bn) as of 31 December 2015, compared to US$ 3.7bn (PKR 388bn) as at 31 December 2014. Faysal Bank also announced a cash dividend of PKR 1 per share (10 percent of share par value) for 2015.

Bahrain-based Ithmaar Bank reported an increase in total income and operating income from its core retail banking operations during 2015 but this improved performance was impacted by recognition of certain investment related impairment provisions. Net income before provisions for impairment and overseas taxation increased 169.2 percent including a 18 percent increase in Operating Income. Overall, the Bank recorded a net loss of $46.4 million in 2015. This compares to a net loss of $8.8 million in 2014. This was mainly due to significant impairment provisions of $95 million in 2015, compared to provisions of $26.1 million in 2014.

Bahrain-based Ithmaar Bank and Tamkeen have announced the launch of a joint financing solution designed specifically to support private sector enterprises in the Kingdom. The financing scheme offers private sector enterprises amounts of up to BHD 500,000 at a subsidised reduced profit rate, a repayment tenor option of up to 10 years, and grace periods of between one month and two years. Participating SMEs can also benefit from a variety of unique features, as well as exceptional flexibility in repayment methods, including monthly, quarterly, and semi-annual payments. The announcement follows an agreement earlier this year to add BHD 10 million to the joint Ithmaar-Tamkeen enterprise finance scheme portfolio which aims to help private sector enterprises meet their financing needs and achieve their business objectives.

In compliance with Central Bank of Bahrain's requirements, Ithmaar Bank publishes its financial results in line with international accountings standards issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). In May, Ithmaar Bank received notification from the Kuwait Stock Exchange requiring the Bank to publish its financial results in line with the International Financial Reporting Standard (IFRS). Ithmaar Bank responded with a letter explaining that publishing two sets of financial results using different international accounting standards will create confusion among investors. Ithmaar Bank wrote to the Kuwait Stock Exchange requesting a meeting to review possible alternatives but has not yet received a response.

Ithmaar Bank, a Bahrain-based Islamic retail bank, has reported a net profit of $7.62 million for the first quarter of 2015, a 261 per cent increase over the $2.11m net profit reported for the same period last year. Net profit attributable to equity holders of the bank for the first quarter of 2015 was $2.64m, a 426pc increase over the $0.5m profit reported for the same period last year. The bank's operating income has increased by almost 46pc to $83.34m for the first quarter of 2015, from $57.13m for the same period last year. This increase is mainly due to overall revenue growth, with net income, before provisions for impairment and overseas taxation, for the period increasing 292pc to $34.4m.

Bahrain-based Ithmaar Bank has announced that the strategic decisions taken by the Bank's Board of Directors early in 2014 have already started yielding results. The decisions, which aimed at turning the Ithmaar Group around by significantly transforming operations, included initiatives for increased revenue, improved margins, divestment of non-core assets and cost reductions across the Group. Ithmaar Bank 's financing business in Bahrain increased by 23 percent to US$914 million at the end of 2014. This growth in 2014 was driven mainly by Home Financing and Personal Financing. Similarly, total customer current accounts, savings accounts, Thimaar and URIA deposits, increased by 11 percent in 2014.

Bahrains Housing Ministry launched the second Social Housing Finance Programme exhibition. The event is one of the ministry's efforts to inform about the programme launched in October 2013.

Ithmaar Bank has issued an investor report on its Shamil Bosphorus Modaraba (SBM), indicating the fund will not achieve its investment objectives and stating that there is also a low probability that investors will have their entire capital returned. The Bank will be contacting investors to discuss the investor report and to explain available options. The SBM is a $90 million investment fund opened in November 2007 and provided equity for the acquisition, development and sale of a diversified pool of assets that included land, property and development sites in Turkey. During 2013, the Bank attempted to negotiate an exit from Turkey with its Turkish partners and more recently it has been conducting enquiries through its appointed advisers and consultants.

The board of Bahrain-based Ithmaar Bank has initiated several measures aimed at reducing costs this year. The initiatives include a combination of increased revenue, improved margins and cost reductions across Ithmaar Group which are expected to result in savings in the range of $25-$35 million annually. The bank now plans to leverage existing resources and share information technology systems and infrastructure between Ithmaar Bank in Bahrain and its subsidiaries, mainly Faysal Bank (FBL) in Pakistan. Moreover, the lender has identified areas to reduce costs, including staff and other overheads, and now wants to realise the full potential of these cost synergies through rationalisation of human resources and IT infrastructure.

Bahrain-based Ithmaar Bank reported a net loss of BHD 29.9 million in 2013, compared to a net loss of BHD 10.1 million in 2012. One of the major factors impacting the performance of the Group for this year is the reduction in benchmark profit rates in Pakistan, coupled with increased minimum profit rate on certain liability products resulting in significant margin compression in FBL. The bank has therefore taken some key decisions including cost rationalization measures across the Group. Moreover, the remaining conventional operations of its subsidiary Faysal Bank Limited Pakistan’s (FBL) will be conversed to Islamic banking, subject to approval from FBL shareholders and the regulators.

Bahrain's Ithmaar Bank has announced its chief executive Mohammed Bucheerei is to retire at the end of August and be replaced by Ahmed Abdul Rahim, currently general manager, as acting head. Bucheerei led the bank's transition from an Islamic investment bank to a retail Islamic lender offering a range of Shari'ah-compliant products.

Operating income continues to be stable at Ithmaar Bank at BD36.8 million, despite a significant compression of margins in overseas subsidiary due to a 300 basis points cut in benchmark profit rates. However, a net loss of BD2.8m was announced for the first six months of the year, compared with a profit of BD583,000 in the same period last year. According to Bank chairman Prince Amr Al Faisal, the bank continues to focus on cost control after total expenses were reduced by about 4.5 per cent in the first 6 months of the year. Murabaha and other financings increased by 1.6pc to BD1.19 billion in the first half as compared to BD1.17bn a year ago. Liquid assets, comprising cash, balances and commodity placements with banks, financial and other institutions, now represent about 13pc of the balance sheet. The bank continues on its board-approved retail business focus with the objective of becoming the region's premier Islamic retail bank.

Ithmaar Bank has formally concluded a merger with First Leasing Bank (FLB), which involved a swap of four Ithmaar Bank shares for each FLB share. The merger enhances Ithmaar's capital base as well as its capital adequacy ratios. It also improves Ithmaar shareholders' profile. According to Ithmaar Bank chief executive Mohammed Bucheerei, the merger will consolidate Ithmaar Bank's position as an Islamic retail bank and create powerful new synergies, improving efficiencies and reducing costs. The necessary procedures in co-ordination with the Bahrain Bourse to merge the registrar of FLB shareholders to the registrar of Ithmaar shareholders are expected to be completed shortly.

Ithmaar Bank helped support a local charity that provides an Education Scholarship Fund (ESF) for children of financially challenged families. Ithmaar Bank Chief Executive Officer and Member of the Board, Mohammed Bucheerei, presented the cheque for the ESF to Azra Mohammed Mohsin, President of the Pakistani Women's Association (PWA) which established the fund. More than 100 children are receiving support from the ESF in the current academic year .

According to a recent announcement by Ithmaar Bank, it will convert the banking licence of its wholly-owned subsidiary in Switzerland, Faisal Private Bank, to a family office. The decision to make such a conversion includes focusing on the further development of Ithmaar Bank's core business of retail and commercial banking. The conversion will be compatible with the interests of the clients and stakeholders. The format of Ithmaar Bank's presence in Switzerland is to be approved in due course by the Swiss financial services regulator.

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Ithmaar Banks merger talks with its associate, First Leasing Bank, has moved on. The boards of both banks approved the plans as well as the kingdom's banking regulator the central bank had given its initial approval for merger.

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