Having slipped off the radar following the 2008 crisis, Noor Islamic Bank (NIB) has returned to the limelight with a robust deal pipeline and profitable operations.
The bank is also increasingly scooping up mandates outside its home market of the UAE, growing into one of the most visible emirates-based banks in Turkey. Its leading position is not unfamiliar – it was awarded Structured Finance Deal of the Year and UAE Deal of the Year in 2008 by Islamic Finance news for its US$1.1 billion Sukuk Mudarabah deal for Sun Finance, as well as Best Tawarruq Deal of the Year 2008 for a US$1.5 billion syndicated multi-currency commodity Murabahah facility for Dubai Financial Group, with other rankings also acknowledging the bank as top mandated lead arranger and bookrunner in Islamic finance in the UAE.
With its business again on the up and up and an eye on new markets outside the UAE, NIB appears poised to regain its leading role as an Islamic finance dealmaker. However, this time around the bank may be in for bigger and better things as it expands its presence on the global stage.
Romancing the Turks
At the end of October this year, the bank announced that it had been mandated to arrange and lead manage more than US$1.4 billion-worth of Islamic capital market deals in Turkey over the last 18 months, buoyed by positive sentiment on the country’s economic and financial sector stability.
The latest of these include a US$350 million dual currency Islamic structured Murabahah syndicated financing facility for Albaraka Türk, the Turkish arm of Bahrain’s Albaraka Banking Group.
Initially planned for US$150 million, the facility’s oversubscription saw it grow to become the largest Islamic structured syndicated financing raised by any Turkish financial institution, said NIB.
The bank also said that it maintains an active pipeline of deals for the rest of this year and going into 2012, including three more Islamic structured facilities which are in the final stages of completion.
Hussain AlQemzi, CEO of Noor Islamic Bank, said that following the bank’s success in Turkey and building upon its growing international brand, NIB will continue to seek strategic opportunities beyond the UAE.
“Our Turkish deal pipeline is very dynamic and we are committed to being an active partner to the Turkish Islamic finance industry,” he added.
Among NIB’s notable deals in Turkey was a US$300 million dual currency Islamic structured Murabahah syndicated facility for Bank Asya, completed in April this year, which also marked NIB’s third venture outside the UAE.
NIB acted as initial mandated lead arranger and bookrunner along with ABC Islamic, the National Bank of Abu Dhabi and Standard Chartered Bank for the transaction, which saw take up from 26 international banks.
With Turkey growing increasingly prominent in the global landscape and the UAE still trying to diversify its economy amid a depressed real estate market, NIB’s first mover advantage in the central Asian/eastern European region may be just the foray it needed to revive its business.
Although known for being protective about its financial results, NIB did publish its first half 2011 results this year, reporting a net profit of AED85 million (US$23.14 million) in the period ended the 30th June. It also recorded a net operating profit of AED207 million (US$56.36 million) and revenue of AED386 million (US$105.09 million), compared to an operating loss of AED9 million (US$2.45 million) in the first half of last year.
NIB attributed its performance to its strategic initiatives and business model realignment undertaken since the beginning of last year, which included a focus on niche business opportunities, increasing revenues and earnings, implementing cost reductions and promoting disciplined risk management practices.
According to Sheikh Ahmed Mohammed Rashid Al Maktoum, the chairman of NIB, the bank will maintain a prudent approach towards its growth strategy.
“We remain confident and positive about our future and are well-positioned to continue to provide consistent performance, both financially and operationally, and to maximize opportunities as the economic situation improves,” he added.
Expanding international presence
Going forward, Hussain said that NIB will remain focused on its capital and liquidity management fundamentals while keeping an eye out for opportunities to optimize its costs.
“We will continue to invest in our core franchise proposition through enhancing our transaction and institutional banking, trade finance and wealth management capabilities. Our geographic footprint continues to remain focused on deepening our relationships with our clients in Abu Dhabi as well as extending the reach of our corporate advisory, capital market and structuring capabilities across the region,” he added.
The bank will also focus on its retail franchise, where it will continue to invest in its sales and distribution strategy, he said.
With a strengthening financial position and its foresight in seeking international deals and diversifying its income streams, NIB may yet emerge as one of the leading players in the global Islamic finance industry. — EB