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Al Hilal Islamic Banking Services to Offer Unique Sharia Compliant Banking Experience

Ahli United Bank B.S.C. (AUB) launched its Islamic Banking services in the Kingdom of Bahrain with the inauguration of its first Islamic banking branch in Arad. The services under the brand name of Al Hilal Islamic Banking Services, were inaugurated by members of AUB’s Sharia Advisory and Supervisory Board with senior officials of the Bank in attendance.

Al Hilal Islamic Banking Services offers customized Sharia compliant banking solutions to customers through dedicated Islamic banking branches in the Kingdom. The first two Al Hilal branches have been opened in Arad and Sanad, which will be closely followed by other branches in other locations in the kingdom.

AUB’s diversification into Islamic banking represents a milestone achievement for the bank and underlines its commitment to constantly improving its overall customer experience through the introduction of unique innovative retail banking initiatives. AUB has developed a new approach to Islamic banking, offering one of the most comprehensive lines of Sharia compliant products and services in the Bahrain market.

AUB’s entry into the field of Islamic banking comes at an opportune time with the rapidly expanding demand for Islamic banking services which is estimated to have grown at a rate of 15 per cent per annum in recent years.

AUB has appointed a Sharia Advisory and Supervisory Board for Al Hilal Islamic Banking Services formed from prominent scholars from around the Middle East comprising of: Professor Ali Muhyealdin Al-Quradaghi, Chairman and members, Dr. Fareed Mohammed Hadi and Dr. Abdul Aziz Qassar.

Professor Ali Al-Quradaghi, speaking on behalf of AUB’s Sharia Advisory and Supervisory Board, said, “The Sharia Board confirms that it endorses the internal principles, regulations and procedures of Al Hilal Islamic Banking Services. The Sharia Board therefore considers it lawful to transact with Al-Hilal Islamic Banking Services in all matters of Islamic financial services”.

Dr. Fareed Hadi, Chair of the Arabic Language and Islamic Studies Department at University of Bahrain, said,” The Board of Directors of AUB has agreed to all provisions requested by the Sharia Board of Al-Hilal Islamic Banking Services and had appointed a Sharia auditor to ensure active compliance with the recommendations and legal opinions of the Sharia Board”.

Dr. Abdul Aziz Al-Qassar said, “We wish to acknowledge the efforts of the Board of Directors, Management and the staff of AUB for going the extra mile to ensure that all contracts and financial products are in accordance with the principles and laws of the noble Islamic Sharia. We hope to see Al-Hilal Islamic Banking Services grow to become a leader in furthering the aims of Islamic banking services in the region”.

Al Hilal Islamic Banking Services sets itself apart by giving more emphasis on complete transparency in all of its financial and operational aspects. The evolution of technology has opened new doors and the development of Shariah compliant programmes and systems has enabled Al Hilal Islamic Banking Services to make use of state-of-the-art technology to facilitate and accommodate a wide range of client needs.

For his part, Mr. Abdulla Al-Raeesi, Deputy Group CEO, AUB, commented: “Al Hilal Islamic Banking Services has been launched as part of AUB’s strategy to offer a comprehensive range of banking services to customers seeking to transact completely within a Sharia compliant system. A complete suite of Retail, Treasury and Corporate banking services will be available through Al Hilal branches including: personal finance, auto finance, home finance, current accounts, savings accounts and investment accounts”.

“AUB plans to expand its Islamic banking operations by adding more branches for Al-Hilal Islamic Banking Services, and adding more Sharia-compliant products to our current offering for both corporate and individual clients”, Mr. Al Raeesi concluded.

For further information about Al Hilal Islamic Banking Services, customers may visit Al Hilal Islamic Banking branches at Arad or Sanad, or call +973 17221999.

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Ahli United Bank B.S.C. (AUB) has reported a net profit of US$ 225.9 million for the nine month period ended 30 September 2007, an increase of 37.5% over the same period in 2006 (US$ 164.3 million). This strong performance reflects the success of AUB’s business model executed through organic growth and regional acquisitions, whilst pursuing prudent and diverse risk management strategies. Furthermore it represents a continuing trend of year on year improved performance trends since inception.

Net interest and other income to 30 September 2007 was US$ 485.1 million (2006 – US$ 363.5 million), an increase of 33.5 %, with a cost-to-income ratio of 34.7% (2006 38.4%). Basic earnings per ordinary share for the nine month period ended 30 September 2007 was US cents 7.52, compared to US cents 5.47 for the corresponding period last year. Dilutive earnings per ordinary share for the nine month period ended 30 September 2007, adjusted for the impact of convertible Class A and Class B preference shares, was US cents 5.94 against US cents 4.37.

The resultant ROAE was 18.5 % as compared to 15.8 % for the same period last year.

As of 30 September 2007, the Group’s total assets stood at US$ 21.9 billion, an increase of 5.3 % over 31 December 2006, with a prudent approach to asset growth adopted in the light of the prevailing potential credit/liquidity driven global market effects arising from the US sub-prime credit crisis. The growth was funded by an increase in customers’ deposits by US$ 832.1 million (+10.0 %) and inter-bank deposits by US$475.4 million (+ 6.9 %) compared to 31 December 2006.

“AUB’s third quarter results are very encouraging; the bank is on track to achieve our targets for 2007. This year has proved very successful for the bank as we have continued to benefit from expanding regionally through strategic acquisitions and participation in high-profile, cross- border deals,” said Fahad Al- Rajaan, Chairman, AUB.

“Recently we signed an agreement to acquire a 35% stake in Alliance Housing Bank S.A.O.G (AHB), Oman together with an intended Technical Services and Management Agreement (TSMA) subject to necessary regulatory and statutory approvals. The Omani economy has tremendous, untapped potential and we hope our banking experience across the region will help AHB gain a significant share in the banking sector.”

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Ahli United Bank B.S.C. (AUB) and Arab Banking Corporation (ABC) today announced the signing of a landmark US$ 480 million facility agreement with Damietta International Port Company (DIPCO). The facility will be used to finance the development of a new container terminal, set to be the largest of its kind in the Middle East, within the Port of Damietta on Egypt’s Mediterranean coast.

Damietta International Port Company which is an international consortium led by KGL PI, a subsidiary of Kuwait-based KGL, was earlier awarded a 40 year concession by the Damietta Port Authority to construct, develop and operate a container terminal which is set for completion in 2009. Located 70 kilometres west of the Mediterranean entrance of the Suez Canal and with links to the world’s busiest trade routes, the new container terminal is part of DIPCO plans to transform the port into a major transhipment hub in the entire eastern Mediterranean.

With a draft of 16.5 metres the new terminal within the Port of Damietta is expected to handle some of the largest containers in the Mediterranean and will significantly lower operating costs and sailing time for transhipment activities. KGL PI has also constructed and currently operates one of the most modern container terminals in the region at Port Saqr in Ras Alkhaimah, UAE, in addition to operating a terminal at its home base of Shuaiba, Kuwait.

The signing of the agreement was announced by Mr. Mohammed Al Mazeedi, Chairman & Managing Director of DIPCO and Chairman & CEO of KGL Ports International Company, Kuwait; Mr. Adel El-Labban, Group CEO and Managing Director, Ahli United Bank and Mr. Abdulmagid Breish, Deputy Chief Executive and Chief Banking Officer, Arab Banking Corporation.

AUB and ABC succeeded in negotiating and documenting the facility agreement within 8 weeks of being selected for this mandate. The financing commitments achieved within such a short timeframe underline the specialised expertise, flexibility and speed which regional banks are now able to provide. The port’s local banking requirements will be handled by AUB through its subsidiary, AUB Egypt, which has a branch in Damietta.

Speaking on the occasion, Mr. Al Mazeedi said, “We are pleased to have two major regional banks acting as lead arrangers for financing such a major project. As two of the Middle East’s premier, integrated banking groups, AUB and ABC have consistently proven that they have both the capability and network to successfully underwrite the most specialised and extensive of infrastructure projects.”

For his part, Mr. El-Labban said, “At AUB, we are pleased to be part of such a high profile project. This project fits well with our strategy to be a major contributor toward the economic development of the region. With our operations in Egypt now firmly established, AUB is perfectly poised to play a leading and expanded role in the financing of projects that are vital to the growth of regional economies like Egypt.”

On behalf of ABC, Mr Breish noted that “we are delighted to be involved in the financing of the Damietta Port project, which is expected to significantly contribute to the infrastructure and trade flows in Egypt and the eastern Mediterranean region”.

The US$ 480 million project finance facility will be syndicated in the coming weeks to a select group of Egyptian, regional and international banks.