News Column

NOMINATIONS -Warba Bank Best New Institution

May 19, 2014

What makes Warba Bank stand out from the competition?

In a market with Islamic finance incumbents of mixed track record, from the very beginning Warba Bank has been committed to deliver on its promise of providing customer-centric, innovative and genuinely Shari'ah-compliant service. Our rigorous organisational core values have always been at the centre of everything that we have done and will continue to be in the future.

Warba's extremely strong parentage in terms of being 24 per cent-owned by sovereign wealth fund the Kuwait Investment Authority (KIA) with the remaining 76 per cent equally owned by the citizens of Kuwait, provides Warba the leading edge as a 'people's bank'. Warba, with its sound leadership and experienced management, has been able to tap into markets and lines of businesses that are value-enhancing for the shareholders and of immense value to the customers. Warba has the ability and opportunity today to define the blue oceans of uncontested market space which the competition significantly lacks.

Has the bank's financial performance lived up to your initial hopes?

Warba Bank's 2013 financial performance exceeded expectations to register a 27 per cent increase in operating revenues year- on-year, to touch KWD 10.3 million. It is particularly gratifying to note that this result has been achieved despite the challenges posed by the local and global economic conditions, as well as fierce competition among local banks. Our business indicators show a remarkable improvement in the bank's performance and the operating efficiency of assets.

Total assets grew by 81 per cent to touch KWD 405.5 million at the end of 2013, while the bank's financing portfolio increased to KWD 218 million registering a growth of 163 per cent - results that we are truly proud of at the bank.

We are also particularly pleased at the growth in customer deposits, which reached KWD 246.8 million at the end of December 2013, showing a massive growth of 216 per cent - as this reflects the confidence of our customers in the institution. Our end-of-year capital adequacy ratio of 47.54 per cent also underlines the bank's strong financial position and quality assets.

What have been the bank's main achievements since becoming operational?

Corporate Banking Group asset portfolio expanded significantly during the last two years, while at the same time ensuring asset quality and returns. Although we were new to the market in 2012, we managed to successfully lead a Shari'ah-compliant syndication facility of over KWD 100 million for National Industries Group (NIG), demonstrating the ability of the bank to raise financing in constrained and risk-averse financial market conditions.

Warba Bank hit the ground running and within the first three months closed a middle income housing project in China, in Banan and Yuzhong districts of Chongqing. Warba realised an IRR of 35 per cent on successful exit from this investment.

Warba Bank also:

??structured and participated in the first Shari'ah-compliant construction financing in the US, which was treated as a building loan contract by the NY statute. The project was the development of multifamily apartment complex in Long Island City, Queens County, New York. Warba realised circa. 18 per cent return from this transaction;

??led the $150 million first Shari'ah- compliant receivable-backed syndicated facility for a wholly owned subsidiary of Alok Industries Limited, one of the largest integrated textile operators in India;

??signed the first RMB clearing account proposal with Standard Chartered Bank making Warba the first bank in Kuwait to facilitate RMB settlement for customers;

??subscribed to the Asia Express Delivery Service programme of Standard Chartered Bank, guaranteeing delivery of payment to the beneficiaries for certain pre-defined countries in Asia either on the same day or the next day. Warba is the only provider of such service in Kuwait;

??identified and participated in the world's largest listed Shari'ah- compliant REIT on the Singapore Stock Exchange and realised cash capital gains of more than KWD 1 million in les than 12 months;

??structured and led a $50 millionn Shari'al-compliant receivable discounting facility for Zain KSA to finance the acquisition of telecom equipment from Motorola; receivables being secured by an irrevocable guarantee from Zain, Kuwait;

?set up a circa $100 million trade finance programme focusing on South East Asia providing genuine Shari'ah-compliant trade finance to counterparties with an expected return of circa five per cent plus per annum on 90-180 day Murabaha; led the financing structured via securitisation of future ticket sales for Pakistan International Airlines Corporation in KSA of circa $130 million;

??built up a diversified portfolio of income generating real estate providing strong risk adjusted returns. Warba currently owns properties in Kuwait, the GCC and the UK;

??is currently mandated by one of the largest Turkish conglomerates to potentially structure the first foreign currency Sukuk to be issued by a Turkish company;

??has a solid pipe-line of debt capital market deals which it expects to execute over the course of 2014; Warba has built an effective platform and a team with strong credentials who have the passion and expertise to originate, structure and execute local and cross-border innovative, risk optimal Shari'ah-compliant transactions that have delivered and continue to deliver outstanding investment returns on Shari'ah-compliant investments. These enhance value to Warba's shareholders and provide a diversified pool of assets to Warba's depositors and customers.

Warba has built up extensive relationships with various sovereign, quasi sovereign and financial institutions and has established lines to facilitate interbank and trade activities and established its strong presence in the syndication markets. Warba enjoys very strong support from all the regional and international financial institutions effectively demonstrated by the strong credit lines enjoyed by Warba.

Warba's team of strong corporate and investment banking professionals can lead complex transactions including but not limited to project finance, asset securitisations and Sukuk issuances, structured finance, etc. that are customised to the needs of the obligors and provide strong credit enhancements to the participants.

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Source: Banker Middle East

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