Arabian Business

UAE's Ajman Bank sacks CEO

Ajman Bank has sacked its Chief Executive Mohammed Zaqout, less than six months after appointing him to lead the United Arab Emirates' lender. The Islamic bank said it had terminated the services of Zaqout with effect from Sunday, with Chief Financial Officer Seifeldin Abdelkareem becoming acting CEO. The bank, listed on the Dubai Financial Market since 2008, is 25-percent owned by the government of Ajman.

Dubai not in refinancing talks on $20bn Abu Dhabi debt

Dubai is not currently in negotiations with Abu Dhabi to refinance $20 billion of crisis-related debt that will come due in 2014. The borrowed amount comprised $10 billion from the UAE central bank and $5 billion each from two state-owned banks in Abu Dhabi, National Bank of Abu Dhabi and Al Hilal Bank. The central bank debt is due to mature in February 2014, and the commercial bank debt in November 2014. Debt market analysts believe Abu Dhabi may quietly roll over the debt if Dubai is not ready to pay it back next year.

Bahrain's GFH sees H1 profits fall despite cost cutting

Bahrain-based Gulf Finance House has announced a net profit of $4.2m for the half year of 2013. Net profit fell compared to $5.7m in the corresponding half year period in 2012 despite a drive to reduce costs. Second quarter net profit also dropped to $2.7m from $4.7m for Q2 2012. Total income for the second quarter was $13.4m compared to a total income of $19.7m for the second quarter of 2012. It said income was primarily generated from management fees from funds under management, investment income and recoveries. It added that operating costs for the half year period reduced by 27 percent to $19.6m compared to $26.9m for the prior year period, underlining ongoing efforts in the streamlining of operations. GFH's new strategy calls for it to become more involved in its investments, and to hold projects until completion rather than passing them to third parties to develop as was done in the past.

Saudi's Al Rajhi Bank to distribute $600m dividend

Al Rajhi Bank will reportedly distribute dividends worth SR2.25bn ($599.9m) for the first six months of 2013. This is equivalent to 1.5 riyals per share. The amount is slightly higher than the 1.25 riyals per share which the bank paid last year. Separately, Banque Saudi Fransi said it would distribute dividends worth SR361.6m ($96.4m) for the first six months of the year. This equates to 0.4 riyals per share. In 2012, Banque Saudi Fransi paid a full-year dividend of 0.8 riyals per share, indicating that this year's payment is in line with that made last year. Al Rajhi is expected to release its second-quarter earnings around July 16.

Gulf pension funds ramp up assets amid Arab Spring

State pension funds in the Gulf are sharply increasing their investments in new assets on the back of the Arab Spring and demographic shifts, according to Invesco’s Middle East Asset Management Study. Regional state pension funds were forecast to grow assets by 19 percent this year. Morover, the study said that about 15 percent of all new sovereign assets in the region were going into state pension funds. In contrast, Gulf sovereign wealth funds (SWFs) are expected to increase assets by an average of just 4 percent, down from 8 percent in 2012. Invesco said that the political unrest in the region had caused governments to pour more cash into pension funds as well as so-called ‘development’ SWFs, which focus their investments on assets that contribute to local economic growth.

Dubai owners unveil new Leeds United manager

Dubai-based GFH Capital, owners of English football club Leeds United, have confirmed the appointment of Brian McDermott as the club's new manager with immediate effect. McDermott has agreed a three-year contract and will be joined by Nigel Gibbs as his assistant. The pairing previously worked together at Reading, where McDermott won promotion to the Premier League last season. McDermott brings with him the experience of having clinched promotion from the Championship last season when he guided Reading to the Premier League.

Kuwait Finance House agrees 20% capital hike

Shareholders in Kuwait Finance House (KFH) have agreed to a 20 percent capital hike, The plans to increase its capital are part of the bank's five-year strategic plan. New shares will be issued at 100 fils ($0.35) per share plus a premium of 400 fils. KFH shares are now trading at 780 fils, down 1.27 percent on the Kuwait bourse. According to Al Watan newspaper, a capital increase could boost KFH's paid-up capital to 348.5 million dinars ($1.24 billion) from 290.4 million dinars.

DEWA sukuk lists for $1 billion

Dubai Electricity and Water Authority (DEWA) has listed its planned $1 billion sukuk on Nasdaq Dubai. The sukuk has raised more than expected, with WAM claiming regional and global investors had reacted positively, leading to an increase in the value of sukuk listed on Nasdaq to $6.24 billion, while the value of sukuk listed in Dubai bourses rose to $10.173 billion. The state utility, rated BBB, had sought a profit of about 3 percent. The proceeds from the five-year deal will be used to refinance existing maturities as well as for new projects. Standard Chartered, Citigroup, RBS and local lenders Emirates NBD, Dubai Islamic Bank and Abu Dhabi Islamic Bank are mandated joint book runners on the deal.

Dubai Group's $10bln debt plan to include more oversight for creditors

Dubai Group's $10 billion debt restructuring will be managed by David Smoot, chief executive officer of Dubai International Capital (DIC). In addition to Smoot's appointment, two banks will be named to a post-restructuring creditor committee to provide oversight of Dubai Group's business to ensure the interests of creditors are protected for the duration of the debt deal. In order to succeed the group is yet to divest some of its larger assets.

Dubai's DEWA to print sukuk this week, sets price talk

Dubai Electricity and Water Authority plans to issue sukuk of at least US$500m this week, after releasing early price guidance for the deal on Tuesday. DEWA is aiming to sell the dollar-denominated sukuk at a profit rate in the low 3 percent area. The sukuk is widely expected to attract strong investor demand. Standard Chartered, Citigroup, RBS and local lenders Emirates NBD, Dubai Islamic Bank and Abu Dhabi Islamic Bank are mandated joint bookrunners on the deal.

Dubai's ICD in talks over first Islamic bond - sources

The Investment Corporation of Dubai (ICD) is in talks with banks to launch its first Islamic bond, in order to diversify its funding sources. The deal will reportedly be completed this year. A source at ICD said the fund had no plans for a sukuk, but is turning to the Islamic bond market because of potential legislation capping lending by local banks to government related entities. Separately, ICD is also talking to bankers over a US$2bn loan due to mature in August, with refinancing the likely option.

UAE citizens "blindly" signing up for loans - dep pm

Emirati nationals are "blindly" signing up for personal loans that they are unable to pay back later, according to Sheikh Mansour bin Zayed, UAE deputy prime minister. Because of this, UAE authorities set aside AED1.05bn (US$410m) for the Nationals' Defaulted Debts Settlement Fund, a programme aimed at clearing defaulted debts owed by Emirati nationals. Any person that with personal loan debts and not commercial or trade loans unpaid before December 2011 will have it covered by the programme. 17 banks take part in the fund which has dealt with approximately half of the 3,200 registered Emirati applicants.

Dubai's Amlak confirms $1.9bn debt restructure talks

Property lending company Amlak Finance is in discussion with creditors about restructuring about AED7bn (US$1.9bn) of debt. This is the latest try to resurrect a victim of Dubai's property crash. THe creditor committee consists of six members including two government-owned funds, Dubai's largest lender and its biggest Islamic bank. Since November 2008, Amlak has not been able to trade due to suspension of its shares along with Tamweel. At that time, the credit markets had dried up the prices of real estates in Dubai began a slump leading them to a decrease of over 50%.

Kuwait's KFH sells properties worth $298m

Kuwait Finance House (KFH) made an announcement about the sale of 16 real estate assets worth KD84m ($298m). Thus, KFH reorganises its property portfolio. No specific locations of the properties released from its portfolio across North America, south East Asia, and Europe were made public. According to Anwar Al-Ghaith, CEO of KFH, the sale aims to ensure better returns for investors and depositors.

Arab investors mull legal action over $516m fund

Arab investors in a €400m (US$516m) French property fund operated by Dubai Islamic Bank (DIB) are seriously thinking about legal action because they have received neither any dividend nor audited financial statements on the fund's status for the last three years. The launch of the Al Rayyan II French Property Fund took place in 2005. It is managed by Qatar Islamic Bank (QIB) on behalf of DIB. The fund was used to invest in several income-producing properties in France. Initially, a yearly return of around 8% was given to the investors.

Saudi's NCB plans Islamic equity and sukuk funds

Saudi Arabian NCB Capital is about to launch a range of Irish-domiciled Islamic mutual funds. This way the company is broadening its investor base and tries to appeal to emerging market investors. The company manages US$12.1bn worth of assets. It has launched two funds investing in Saudi Arabian and GCC equities. NCB's plans include the launch of other funds including one that will invest in sukuk.

QIB UK closes seventh Islamic structured note

QIB UK, which is situated in London, has closed its seventh Islamic capital-protected note. The bank's plans further include rolling out similar products every year. Since the launch of its "Hemaya" structured note programme in 2010, QIB UK was able to raise over US$190m. US$153m of the sum were raised by the first six tranches.According to Anouar Adham, the bank intends to launch several tranches every year.

UAE gov’t sets aside $410m to clear Emirati debts

AED1.05bn (US$410m) have been set aside by the government of the UAE in order to clear defaulted debts which Emirati nationals owe. According to a recent statement, the Higher Committee of the Nationals' Defaulted Debts Settlement Fund has given its approval for this sum complying with a directive by the Gulf state’s president HH Sheikh Khalifa bin Zayed Al Nahyan. The directive states that rescheduling of loan repayments by indebted citizens is not to exceed half of their monthly income. Banks on the other side have agreed to cut interest on monies owed by 1%.

Three to five years to comply with UAE lending rule - bank boss

According to Hussain Al Qemzi, CEO of Noor Islamic Bank, three to five years will be necessary in order to to comply with new central bank regulations. The regulations state requirements for lenders to limit their exposure to state entities in the Gulf state. The new rules restrict banks from lending more than 100% of their capital to government institutions or more than 25% of their capital to any state-related entities. Hussain Al Qemzi described the given timeframe as "challenging".

Five senior QInvest managers leave after CEO quits

Five senior members of QInvest have been replaced in order to increase effectiveness and efficiency while maintaining the bank’s strategic direction which is now concentrated on the joint venture with Egypt’s EFG-Hermes.

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