IslamicFinance.de

London-based European Islamic Investment Bank (EIIB.L) will propose a capital reduction plan next month to enhance returns for its shareholders, after the firm swung back into profit in the 2013 financial year. EIIB will seek shareholder approval for the plan, which could potentially take the shape of a share buyback or a tender offer, during its annual general meeting in June. The firm posted a pre-tax operating profit of 1.5 million pounds in 2013, compared to a 10.1 million pounds loss a year earlier. Under its 2012-2016 strategy, EIIB is restructuring its business by exiting higher-risk private equity investments, seeking more stable income streams such as asset management and advisory services under its EIIB-Rasmala brand.

EIIB-Rasmala, a venture between London-based European Islamic Investment Bank and Dubai's Rasmala Group, plans to widen its range of Islamic investment products with the hope of doubling assets under management over the next two years. The firm, which manages over $1 billion in assets, sees growing mid-market opportunities for its Islamic asset management and investment banking business lines, chief executive Zulfi Hydari said. By mid-market, the firm means medium-sized customers which may no longer be served by big investment banks. In investment banking, the firm is focused on arranging Islamic bonds, with deal sizes between $75 million to $150 million. Earlier this month, the firm already arranged the first tranche of a $100 million sukuk programme from FWU Group.