One such example of this rising success is Sharjah Islamic Bank (SIB), which has strengthened its position through the opening of new locations, expanding its services and a significant acquisition in the tourism industry.
SIB continued its growth throughout the UAE in late July with the opening of its fourth branch in the region, in Fujairah, in line with its strategic plan to raise the total number of its branches from 18 to 21 by the end of the year.
According to Mohammad Abdullah, CEO of SIB, the opening of the bank in Fujairah is an effort to capitalise on “the Eastern region as one of the most important areas in terms of economics and tourism in the UAE. The new branch will meet the increasing demand for banking services […], in addition to providing retail and corporate banking services”. The bank’s other branches in the region are in Khorfakkan, Kalba and Dibba al-Husn.
Another area of growth is the bank’s brokerage services subsidiary, Sharjah Islamic Financial Services (SIFS), which opened an office in Abu Dhabi. SIFS, which was launched late last year, was created after market analysis showed a lack of sharia-compliant brokerage services, despite the rising popularity of Islamic banking. SIFS offers Islamic approved shares and sukuk trading, and is one of the first companies to allow the trading of securities through the Abu Dhabi Securities Market (ADSM) and Dubai Financial Markets (DFM) simultaneously. The Abu Dhabi branch of the brokerage house is in addition to offices in Sharjah and Dubai.
Adding to the bank’s expansion, in spring 2007, SIB launched ASAS Real Estate, a real estate development affiliate for property and real estate management, construction, development and investment. In 2006, SIB acquired 100% share capital of Sharjah National Hotel Corporation (SNHC) from the Sharjah government for $141.6m. SNHC’s portfolio included a number of high-end hotels and resorts such as Sharjah’s Holiday International Hotel and the Marbella Resort as well as the Oceanic Hotel in Khorfakkan.
SIB’s reported income from subsidiaries in the first half of 2007 jumped to $8.7m compared to $1.4m recorded in the corresponding period of the previous year, which analysts said was buoyed by the SNHC purchase.
Overall, SIB’s financial performance in the first half of 2007 showed strong year-on-year growth. SIB announced that its net profit had increased by almost 33%, to reach $33m, up from $24.9m, compared to the corresponding period last year.
The balance sheet reported strong growth of 19.5% since December 2006, as total assets reached $2.5bn in first half 2007, up from $2.1bn last year. Customer deposits reached $1.5bn, an increase of 23% since December 2006.
SIB’s ratings were recently upgraded by the international ratings agency, Capital Intelligence, to BBB+ for foreign currency long-term ratings and A2 for the short-term ratings, from BBB and A3 respectively, with a stable outlook. “This is a reflection of the success of the efforts undertaken to execute our strategic objectives,” said Abdullah.