As one of just a handful of Islamic financial institutions in Qatar, Barwa Bank has emerged as a leading investment bank, participating in a number of high profile Shariah compliant financing deals, locally and abroad.
Among its biggest coups to-date is its involvement in Qatar’s landmark US$4 billion Sukuk issuance earlier this month, positioning itself among global banking giants such as Deutsche Bank, HSBC and Standard Chartered. With Qatar’s Islamic finance industry growing significantly and the country’s development pipeline opening up room for hefty financing deals, Barwa Bank’s investment banking focus appears set to pay off.
Investment banking focus
Established in 2009 as an associate of the Barwa real estate group, Barwa Bank quickly established its investment banking focus with the acquisition of local investment banking outfit The First Investor (TFI) in the same year.
In an earlier interview with Islamic Finance news, Steve Troop, Barwa Bank’s CEO, noted that the bank will remain a niche banking player servicing a selective customer base. “We are never going to be a multi-branch, mass market network as those segments are already well provided for,” he said.
This year, the bank has demonstrated its growing clout in the global Sukuk arranging space, ranking higher than QInvest, which has traditionally been Qatar’s leading Islamic investment bank, in Dealogic’s league tables for top managers of Sukuk.
Apart from the Qatar sovereign Sukuk deal, other notable deals Barwa Bank has been involved in 2012 include Emaar Properties’ US$500 million Sukuk issuance and a QAR3.7 billion (US$1 billion) conventional and Islamic syndicated facility for Bawabat Al Shamal Real Estate Company, the developer of Doha Festival City. The syndicated deal has been touted as the largest private sector syndicated transaction in Qatar.
Diversified operations
In addition to Barwa Bank’s own hive of activity, its unit TFI has also stayed busy, allowing Barwa Bank to diversify its business. In May 2012 alone, TFI advised on a deal involving an acquisition of a 50% stake in Qatar’s Bin Omran Trading and Contracting Company by Hector Real Estate Investment; while its TFI-Hines Brazil Income Real Estate Fund, a joint venture with US real estate management and investment firm Hines, completed its first seed acquisition. The fund is Brazil’s first Shariah compliant, closed-ended fund.
Also to complement Barwa Bank’s business, the bank acquired local financing firms First Finance Company and First Leasing Company in 2010. With its diversified operations, the bank appears to have dotted its ‘i’s’ and crossed its ‘t’s’ in its bid to offer a universal banking service.
Strong balance sheet
As an unlisted entity, Barwa Bank only discloses its annual financial results. In 2011, the bank reported an impressive set of results, posting an almost 882% year-on-year growth in profits to QAR244.34 million (US$66.09 million), as net income almost doubled to QAR665.72 million (US$180.07 million).
Its total assets also more-than-doubled to QAR19.11 billion (US$5.17 billion) during the period, with receivables and balances from financing activities amounting to QAR9.22 billion (US$2.49 billion). The bank also showed healthy asset quality, not booking any impairment for financing in 2011.
With a strong balance sheet and a focused approach to its operations, Barwa Bank may yet further surprise on the upside going forward. — EB