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03 December 2023

Bahrain bank launches investment banking unit

Jamal Hijres (SUPPLIED)

By Staff Writer

Bank of Bahrain and Kuwait (BBK) yesterday launched wholesale Islamic investment banking arm with an authorised capital of $500 million (Dh1.8 billion) and paid-up capital of $125m.

The new bank – named Capinnova Investment Bank – is licensed by the Central Bank of Bahrain, a press statement said yesterday.

Capinnova's Chairman A Karim Bucheery, said the growth of Islamic banking industry in particular has been remarkable in recent years and it is expected to reach $4 trillion in the next five years, according to Standard & Poor.

Capinnova Investment Bank aims to leverage on this exponential growth and further strengthen the Islamic banking industry in Bahrain and across the region.

Capinnova's core areas of business include private equity, asset management and corporate finance and it will provide several value-added financial services. The bank will develop Shariah-compliant investment products and services for financial institutions, corporate customers, high net-worth individuals, investors and family businesses, regionally and globally.

"Capinnova's vision is to be a world-class Islamic investment bank, offering a range of high-quality products and services to a diverse clientele. Our mission is to become the Islamic investment bank of choice and a niche player, providing clients in the GCC and Mena region with superior investment products aimed at building and sustaining shareholder value, whilst maintaining an optimal balance between risks and returns," Capinnova CEO Jamal Hijres said.

Capinnova will provide a variety of products, including murabaha, ijara, mudaraba, musharaka, al salam and istitsna'a, restricted and unrestricted investment accounts, syndications and other structures used in conventional finance, which have been appropriately modified to comply with Shariah principles.

"Our board of directors and executive management are seasoned bankers with considerable wealth of local and global experience. We will aim to provide the market with differentiated investment offerings targeting top quartile returns on a consistent basis," Hijres said.

In recent years, Bahrain has rapidly become a global leader in Islamic banking, playing host to the largest concentration of Islamic financial institutions in the Middle East. In addition, Bahrain is at the forefront in the market for Islamic securities (sukuk), including short-term government sukuk as well as leasing securities. The Central Bank of Bahrain has played a leading role in the introduction of these innovative products.