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Thursday, 21 June 2007

There is a substantial market opportunity for structured financial products in the wakala model

Emirates Bank Group (EBG) through its subsidiary Emirates Islamic Bank (EIB) and Amlak Finance, the largest publicly listed Islamic finance company and pioneer in home finance in the UAE yesterday announced the signing of an AED 800 million flexible 360 day Wakala facility.This is the first step of a much more comprehensive relationship between the two leading Islamic finance institutes in the UAE which will deliver innovative Islamic Finance products to the regional market. The signing ceremony was attended by numerous dignitaries from EIB and Amlak Finance including Ebrahim Fayez Al Shamsi CEO of EIB and Nasser Al Sheikh Chairman of Amlak Finance and Arif Alharmi CEO of Amlak Finance signifying the importance of the agreement and commitment of both parties to its success. 'We are very excited about this landmark agreement and hope that it will, inshallah, be the beginning of a long and fruitful relationship between the two parties,' commented Abdulla Showaiter, GM of Corporate and Investment Banking EIB. 'This is a great example of a local specialist bank providing the in-house knowledge to deliver an intricate financial structure to a reputable home finance specialist, which will definitely contribute to enhancing the already powerful financial status of the Emirates Bank Group.'
'There is a substantial market opportunity for structured financial products in the wakala model, and we believe this partnership approach delivers flexibility and speed to market that mark a significant milestone in the development of the regional Islamic Finance Industry. This partnership has been designed to deliver many more financial products to follow as our relationship with Amlak Finance develops,'concluded Showaiter. 'Establishing strategic alliances with leading financial institutions is a core element of our strategy going forward,' commented Arif Alharmi, CEO of Amlak Finance. 'Sealing a financial transaction of this magnitude with a respected industry stalwart such as Emirates Islamic Bank and Emirates Bank Group is an important milestone on our continuing journey to drive growth through innovative and flexible funding strategies. 'The efficiency of the structure that we have agreed with Emirates Islamic Bank will increase Amlak's liquidity in the short term, allowing more focus on developing the core business without deviating from the principles that are central to the company. We look forward to combining our mutually proactive and innovative approaches to the Sharia'a Finance market to ensure that both organizations remain at the forefront of this rapidly developing industry,' added Alharmi. Greater economic activity has created a great appetite for more sophisticated financial structures in the region particularly within the Islamic Finance arena. As a premier financial institution, Emirates Bank Group has been proactive in positioning itself as a leading provider of Islamic finance solutions in the UAE. Wakala was recently approved by the FSA in the United Kingdom as an accepted deposit product under UK banking regulations, and its more flexible nature has led to expectations that wakala will eventually outgrow the traditional murabha product which currently holds approximately 80% of the market.
AME Info, 21 June 2007

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