Two Gulf-based investment firms have announced their results for past year - and both have posted profit.
Tadhamon Capital, an Islamic investment company based in Bahrain, announced profit of $28.6 million for its first period of operations (15-months). Total revenues amounted to $34 million, including fee income of $30.3 million and profits from proprietary investments of $3.7 million.
Venture Capital Bank, another Islamic investment bank specializing in venture capital investments in MENA region, announced a net profit of $11 million, compared to $47 million the year before. The total income reached $32.4 million, while it was $82 million the year before.
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Their full releases follows
Tadhamon Capital, a category 1 Islamic investment company based in Bahrain, has announced a net profit of US$28.6 million for its first period of operations from 15th September 2008 to 31st December 2009. Total revenues for the period amounted to US$34 million, including fee income of US$30.3 million from arranging transactions and managing portfolios for clients, while profits from proprietary investments contributed US$3.7 million. Total operating expenses for the period, which included one-time initial set-up costs, amounted to US$5.4 million.
Commenting on the results, the company Chairman Abdulgabbar Hayel Saeed said: "We commenced our business at a time when the world was gripped by the worst financial crisis in a century. In spite of the difficult challenges, we are extremely pleased with our performance. The company has achieved outstanding results due to its ability to source superior investments for its clients who have vested their deep faith in our abilities." Mr. Saeed expressed his sincere gratitude to the company's clients, the regulatory authorities in Bahrain, and to the company's employees for their steadfast commitment.
Tadhamon Capital's vision is to become a leading financial institution that promotes Islamic finance on a global level by providing its investors with attractive, diversified and innovative Sharia'a compliant solutions. Its principal business activities include arranging, structuring and managing new investment products across its main business lines which include Asset Management, Private Equity, Real Estate, Treasury and Wealth Management.
During its first period of operations, the company successfully arranged major property acquisition and development projects in Saudi Arabia and other GCC and North African countries. Besides, the company has recently launched a regional equity fund to invest in listed stocks, and will shortly be launching a Sukuk fund and two other private equity funds. Client assets managed by the company have already exceeded US$ 600 million.
Chief Executive Officer and Board member Waleed Rashdan announced that the company has a strong pipeline of attractive and well diversified investment solutions. He commented "Our specialist team discerningly identifies and evaluates attractive investment opportunities based on a solid understanding of the market, strong fundamental research and analysis, and extensive experience--which we can offer to local and regional investors with greater ease of access to a wide range of markets."
Mr. Rashdan explained the company's business model which is focused on identifying the best investment opportunities and working with key strategic partners to tap those opportunities for the ultimate benefit of the company's clients and shareholders. He said the company has already forged strategic relationships with strong partners in each of its main business areas. Besides, the company has put in place a sophisticated framework for corporate governance and risk management, and has implemented state-of-the-art information technology systems, processes and controls.
Tadhamon Capital is a 100% owned subsidiary of Tadhamon International Islamic Bank (TIIB) which, in turn, is majority owned by a leading regional conglomerate, Hayel Saeed Anam & Co (HSA) Group, with Qatar Islamic Bank also as a prominent shareholder.
Venture Capital Bank B.S.C. (c) (VCBank), announced that the Bank reported a net profit of $11m for the year ended 31 December 2009, compared to $47m last year. The total income reached $32.4m, while it was $82m last year.
The net profit for the last quarter of 2009 was $1.7m compared to $8m for the same period last year. The results were announced following a meeting for the Board of Directors of the Bank, where the financial results for 2009 were approved.
Commenting on the results, Dr. Ghassan Ahmed Al Sulaiman, Chairman of VC Bank, said
"The world witnessed unprecedented economic and financial challenges during last year, but with the blessings of God, the Bank was able overcome these challenges with high efficiency and superior stable and positive performance. Characterized by, and continued investments and projects to achieve good results, while our investments and projects continued to achieve positive results and the bank continued strengthening its institutional capabilities, and completed the second process to increase the bank's capital, with considerable success."
"During 2009, VCBank managed to realize good and positive financial results in comparison with the prevailing market conditions. Net profits reached to $11m and achieved a return on equity of 5.4% for 2009, keeping in mind the increase in the Bank's capital. The Bank has consistently returned net profits since its inception in 2005, which is an excellent performance for a young investment bank, particularly given the turmoil experienced from the start of the current financial crises beginning in September 2008. Furthermore, our balance sheet has grown from a modest base of $66m at inception to a total balance sheet size of $360m now; an increase of 5.4 times since inception and of 48% over last year. In addition, off balance sheet fiduciary assets have grown from zero at inception to $672m as at 31 December 2009. This track record is further corroboration of VCBank's status as the first Islamic investment bank specializing in venture capital investments in small and medium businesses (SMEs) in the MENA region" he added.
The total income, for the period ended 31 December 2009, reached $32.4m, while the total expenditures for the period was $21.4m, an outstanding performance in the fourth operational year for the Bank. The total assets of the bank as of 31 December 2009, were $356m, while total shareholders' equity before allocations was $286m. The Bank maintained a high rate of liquidity in short-term bank Murabaha with specialized banks in this field. VCBank have high capital adequacy, which is higher than the minimum requirements by the Central Bank of Bahrain's 12%.
The Board of Directors raised a recommendation for General Assembly approval to distribute 8.5% Bonus Shares to the Bank's Shareholders.
From his side Mr. Abdullatif Mohammed Janahi, Board Member and VCBank CEO, said "With the continuous difficult economic conditions and operating environment which imposed a myriad of challenges during the year 2009, VCBank relentlessly continued its successful progress toward realization of its vision to become the leading regional Islamic venture capital investment bank. In the light of the negative consequences of the global financial downturn, VCBank continued to embrace a conservative and balanced approach to enter into new investments and focused on profitable projects to ensure realization of its objective both to add value to the shareholders and investors and contributing to Bahrain's economic and social development."
During 2009, VCBank launched the Royal Maternity Hospital, an innovative project focused in the premium health care segment. We remain focused on the MENA region, targeting sound and yielding private equity opportunities from sound and well-managed small-to medium enterprises (SMEs). The Bank also initiated an innovative Liquidity Program totaling $55m comprising Shari'ah compliant Certificates structured in connection with the exit of its Venture Logistics Properties investments, which has been exited at excellent return on Investment of 138% and 82% and an IRR (Pre Performance Fee) of 35% and 27% for the investors".
VCBank conducted during 2009, several deals that enhanced our current investment portfolio. VCBank has successfully signed a partnership agreement with Dutch Delight, a Bahraini company specializing in the production of high quality handmade chocolates, which is a clear validation of VCBank's business model to invest in small and medium-sized companies, which represents a large and effective part of the global economy. The Bank also organized several forums and seminars for entrepreneurs in the Kingdom of Bahrain, to introduce them to Bank's role and Bahrain VC Fund.
Moreover, Jordan Al Abyad Fertilizers and Chemicals Company (JAFCCO) received a syndicated financing facility of $45m managed and lead by Jordan Ahli Bank to further finance the work in progress of its industrial complex to manufacture fertilizers and chemicals. Challenger Ltd. Received a $60m working capital facility with Natixis,a European bank specialized in the oil and gas sector, which will provide further financial strength for expansion. One of 2009 achievements, VCBank received approval from the Capital Market Authority of the Kingdom of Saudi Arabia to establish the Saudi Venture Capital Investment Company. VCBank also announced the completion of the German Orthopaedic Hospital in Bahrain, which represents a state of art medical facility specializing in the provision of orthopaedics healthcare and is operated by world renowned orthopaedic surgeons and medical staff from the Federal Republic of Germany, and provide an effective local and regional alternative to medical tourism destinations, particularly Europe" added Mr. Abdullatif.
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