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| Date/Time | Headline | Source |
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| 15-03-10 | RNS |
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RNS Number : 6039I European Islamic Investment BankPLC 15 March 2010 European Islamic Investment Bank plc ("EIIB") Proposed Partnership Further to the announcement of the appointment of Mr. Subhi F. Benkhadra as Chief Executive Officer of EIIB, the Board of EIIB is pleased to announce that EIIB has entered into discussions with Esterad Investment Company BSC ("Esterad"), with a view to partnering with Esterad for the establishment of a Sharia'a compliant asset management business to be based in Bahrain. This is subject to approval by the Central Bank of Bahrain and the UK Financial Services Authority. 15 March 2010 Enquiries:
Subhi Benkhadra, Chief Executive Officer Keith McLeod, Finance Director
Bobbie Hilliam Chris Sim
Michelle James Andrew Marshall This information is provided by RNS The company news service from the London Stock Exchange END
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| 15-03-10 | RNS |
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RNS Number : 5464I European Islamic Investment BankPLC 15 March 2010 15 March 2010 European Islamic Investment Bank plc ("EIIB") Directorate Change The Board of EIIB is pleased to announce the appointment of Mr. Subhi F. Benkhadra, aged 46, as Chief Executive Officer of EIIB with immediate effect. Mr. Benkhadra, is currently a Non-Executive Director of EIIB and joins from Esterad Investment Company BSC, a Bahrain-based publicly quoted Investment Company, where he held the position of Chief Executive Officer since May 2003. Details relating to Mr. Benkhadra's appointment remain as announced on 3 July 2008, except that he is currently a director of Palma Capital Limited, a DIFC company; and Accelerator Technology Holdings Limited, a Guernsey company. Mr. Benkhadra holds a B.Sc (Engineering) from the University of Bath, UK and an MBA from City University Business School, UK. Mr. Benkhadra has no beneficial or non-beneficial shareholdings in EIIB. There are no further disclosures required to be made in respect of Mr. Benkhadra with regard to paragraph (g) of Schedule 2 of the AIM Rules. Commenting on the appointment Mr. Adnan Ahmed Yousif, Chairman of EIIB said: "I am delighted that Mr. Benkhadra has joined EIIB. He brings a wealth of experience and knowledge of financial services in both Europe and the Gulf, and will provide inspirational leadership for the Bank". Mr. Benkhadra added: "I am delighted to be joining a Bank of the calibre of EIIB. I know the Bank and its staff well from my time as a Non-Executive Director. I am excited by the challenges and opportunities which will arise as the Bank enters its next phase of development. We are seeing early signs of improvement in global markets and, although we remain cautious about the rate of recovery, I am confident that the Bank is well positioned to use its strong capitalisation and liquidity to develop its position in the growing Islamic Banking market." Mr. Keith McLeod, the Interim Chief Executive Officer will step down from this role and revert to his role as Finance Director. The Board would like to extend its thanks to Mr. McLeod for taking on the role of Interim Chief Executive Officer during this transition period. Enquiries:
Subhi Benkhadra, Chief Executive Officer Keith McLeod, Finance Director
Bobbie Hilliam Chris Sim
Michelle James Andrew Marshall This information is provided by RNS The company news service from the London Stock Exchange END
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| 10-03-10 | RNS |
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This news article is displayed preformatted as it may contain results tables
RNS Number : 3374I
European Islamic Investment BankPLC
10 March 2010
European Islamic Investment Bank plc
10 March 2010
Results for the year ended 31 December 2009
The Board of European Islamic Investment Bank plc ("EIIB", the "Bank" or the "Company") announces its audited results for the year ended 31 December 2009.
For further information, please contact:
EIIB plc Tel: +44 (0)20 7847 9900
Keith McLeod, Interim Chief Executive
Evolution Securities Tel: +44 (0)20 7071 4300
Chris Sim/Bobbie Hilliam
Fishburn Hedges Tel: +44 (0)20 7544 3056
Michelle James/Andrew Marshall
CHAIRMAN'S STATEMENT
2009 has been another extraordinary year for global financial markets with capitalisation and liquidity concerns affecting a large number of financial institutions. Liquidity, increased provisioning levels, exposure to the Real Estate sector and low real returns on Money Market activities were themes which characterised the Islamic financial markets during this period.
The Board of EIIB recognised at an early stage that 2009 would be a challenging year and I am pleased to report that the Bank has remained highly liquid; (+361% vs. the FSA minimum of -5%). This coupled with the strong capital position (£132.9m vs. the FSA minimum of £13.6m) has meant that the Bank has been better positioned than most to weather the storm.
The overall result for the year of a loss of £22.2m, whilst disappointing, is broadly in line with the result at the end of the first half of the year. Operating Profit on continued operations before tax, fair value losses, impairments and oil & gas activity declined from £4.3m in 2008, to a loss of £4.0m in 2009. The move from profit to loss was primarily driven by the unprecedented decline in market yields, indeed at the operating level, core Operating Expenses (excluding fair value adjustments, impairment provisions and operating expenses on oil and gas activities) remained static at £7.8m between 2008 and 2009.
Islamic Capital Markets experienced a significant recovery during the second half of 2009, after a subdued first half. A number of high quality entities, e.g. Petronas, GE Capital Corp, Islamic Development Bank, Tourism Development and Investment Company and International Finance Corporation, successfully issued Sukuk during this period, proving that investors retained an appetite for well rated issuers. Unfortunately, events in Dubai towards the end of the year had a materially negative impact on market sentiment, causing the recovery to largely stall.
The Bank continues to actively manage its exposures to Ahmad Hamad Algosaibi and Brothers Company and Saad Golden Belt 1 Sukuk. Events at these enterprises have been the subject of much debate and speculation in the media and after careful consideration the Directors' have concluded that the timeframe, and ultimate recovery of these amounts are highly uncertain and have therefore decided to increase provisions against these exposures up to £13.4m.
The Bank's Private Equity capability has continued its development during 2009, reflecting the surge of potential investment opportunities which have arisen as the Bank has become recognised as an investor of choice. The Board has maintained its careful and prudent approach to the valuation of Private Equity investments, as we believe that this is the only way to develop a credible long term track record of investment performance. With this in mind, the Board has decided to provide £5.1m against the investments in DiamondCorp Plc and TriTech.
During the last quarter of 2009, the Bank undertook a capital reduction and tender offer. The transaction was conducted to provide some liquidity for smaller shareholders who wished to realise some or all of their investment in the Bank. The capital reduction and tender were successfully concluded in December 2009.
As noted in my Interim Statement, during the third quarter of 2009, the Bank received a number of approaches from third parties who were interested in a business combination with EIIB. The Board determined that the approaches did not make strategic sense, nor did they fairly reflect the value of EIIB, hence the discussions were terminated.
On 30 December 2009 the Pan-European Islamic Real Estate Fund was sold to ED Limited, a Cayman Islands registered company. The disposal of this entity effectively concluded the disposal of the property portfolio originally acquired in 2007 by its subsidiary The House Limited, and hence, the loss (£7.1m) accounted for in the Interim income statement was reversed in the second half of 2009.
As I noted in my Interim Statement, Mr. John Weguelin, decided to stand down as CEO of EIIB in August 2009. An extensive search process is currently underway to find a replacement CEO; whilst this process is taking longer than the Board would like, it is obviously vital to ensure that the right person is found for this key role. In the meantime, on behalf of the Board, I would like to take this opportunity to thank Mr Keith McLeod for his continuing diligent and professional stewardship of the Bank during this transitional period.
The strategic review of the Bank's activities referred to in my interim statement has made substantial progress. The new CEO will be charged with refining and concluding the Bank's new strategic development, as well as delivering the strategic vision.
I am excited about the Bank's prospects as it moves into this next phase of development. There will be many fresh challenges ahead, but I am confident that EIIB will start to deliver the building blocks required to construct a long term profitable future.
Adnan Ahmed Yousif
Chairman
OPERATING AND FINANCIAL REVIEW
INTRODUCTION
The Directors present the Operating and Financial Review for 2009. Having followed the framework set out in the Accounting Standards Board's Reporting Statement: Operating and Financial Review as a guide to best practice, the Directors believe they have discharged their responsibilities under Section 417 of the Companies Act 2006 to provide a balanced and comprehensive review of the development and performance of the business.
EIIB'S OBJECTIVES AND MARKET ENVIRONMENT
EIIB was the first independent Sharia'a compliant investment bank to be authorised by the Financial Services Authority (FSA). The Bank received its authorisation on 8 March 2006 and is listed in the UK on the Alternative Investment Market within the London Stock Exchange.
The Bank was established to bridge the gap between the financial markets of the Islamic world and those of Western and OECD territories. It delivers products and services across asset classes to the Islamic wholesale, institutional, and high net worth individual markets. The Bank's competitive positioning is significantly enhanced by its base in the pre-eminent global financial centre, London.
The key principles of Islamic banking are derived from the Quran and are based on the avoidance of:
· Interest
· Uncertainty
· Speculation
· Unjust enrichment or unfair exploitation
The Bank's Sharia'a Supervisory Board, comprising eminent Islamic scholars, is tasked with ensuring that all products are structured to reflect these principles.
BUSINESS OBJECTIVES
The current operations of the Bank are organised into two business units:
TREASURY AND CAPITAL MARKETS
EIIB's Treasury engages in foreign exchange spot and the Islamic equivalent of forward foreign exchange markets and promotes liquidity in the Islamic money markets. The unit manages the short and medium term liquidity profile of the Bank within the guidelines laid down by the FSA and the Bank's Asset and Liability Committee. In addition to being involved in Islamic interbank commodity murabaha and wakala money markets, it seeks to build a sustainable base of third party deposits by establishing direct relationships and structured investment products.
The Capital Markets unit's remit covers a range of activities including, but not limited to, term financing, sukuk and structured trade finance. It is involved in all aspects of the product value chain, including origination, structuring, underwriting and distribution. The Bank invests in mandated financing issues and develops and maintains an active secondary market in such issues.
PRIVATE EQUITY AND CORPORATE ADVISORY
EIIB's Private Equity and Corporate Advisory Team ('PECA') operates a private equity investment business and provides advisory services to the Bank's clients. PECA sources opportunities to invest in both private and stock exchange listed companies and invests in businesses that meet the criteria set by the Bank's Board Executive Committee. PECA's investment remit is to source transactions primarily from outside of the Gulf Co-operation Council countries and, whilst that remit is global, PECA focuses on investment opportunities within Europe, the Middle East, USA and Africa.
Investee companies are sought that are revenue producing, recession resistant and have good prospects of generating significant upside within a target period of two to four years.
BUSINESS STRATEGY AND RESULTS
2009 continued to be exceptionally challenging for all financial institutions. The overriding themes of depressed asset prices and lack of confidence resulted in very low transaction volumes in the Islamic capital markets. Low profit rates in the sukuk, murabaha and wakala markets reflected the low global base rate environment.
EIIB's results at the consolidated level reflect a loss of £22.2m after tax. The loss reflects the subdued operating environment, and fair value and impairment provisions against two Capital Markets and two Private Equity assets.
EIIB makes term financing facilities available under a number of Sharia'a compliant structures. Prior to committing any financing, EIIB undertakes rigorous credit and risk assessment of the obligor. Capital Markets funding made available to Ahmed Hamad Algosaibi and Brothers Company and Saad Golden Belt 1 Sukuk Company have defaulted during the year and EIIB has made provisions of £13.4m against these.
The Private Equity and Corporate Advisory business acquired its second asset, an interest in a joint venture oil and gas exploration activity during 2009. The division's first acquisition, DiamondCorp Plc, a diamond production company operating in South Africa, has suffered severe financial difficulties during the year. The Oil & gas venture is still in the exploration stage and its success is yet to be determined. In line with Boards' cautious approach on asset valuation, £5.1m is recognised as fair value deterioration and impairment against the two investments made.
EIIB held an interest in a portfolio of UK commercial property through a shareholding in the Pan-European Islamic Real Estate Fund ("PEIREF"). The portfolio was owned by The House Limited ("THL"), a subsidiary of PEIREF. Following a breach of a covenant by THL at the end of 2008 the third-party financial institution that provided senior funding to THL, exercised their security and appointed a receiver to take over the property portfolio. In December 2009 EIIB sold its interest in PEIREF. EIIB's investment in PEIREF was fully written-off by the end of 2008 and hence the 2009 annual financial statements are not impacted by the sale (the net liability position of PEIREF that was reflected in the consolidated interim financial statements -June 2009- has reversed following the disposal).
PEOPLE
A significant differentiating factor for our business has been our ability to attract quality staff from the London market. The Directors believe that the Bank has a competitive remuneration structure, which enables EIIB to retain and attract staff of the highest calibre.
OPERATIONAL
The Bank has built an operational infrastructure that is robust and scalable. The Directors are confident that the controls around these systems and processes are effective in protecting and safeguarding the Bank's assets. EIIB's Internal Audit department, under the direction of the Board's Audit Committee, is responsible for working with management to identify and quantify risk, provide independent appraisals of systems of internal control, add value to business initiatives and support development of a sound control culture throughout the Bank.
RISKS
EIIB is exposed to market risk in relation to its proprietary investments, counterparty risk from transactions with third parties, particularly money market transactions, liquidity risk from liquidity mismatches and operational risk.
The Bank's measured approach to risk is documented in the risk policy. Under this policy risk is monitored on a daily basis.
KEY PERFORMANCE INDICATORS
The Board are of the view that management should build the business while tracking performance against indicators such as return on equity ('ROE'), staff turnover and efficiency. As business activities further develop, the Bank will benchmark these key performance indicators ('KPI's') against international Islamic banking institutions. The Bank does not consider it meaningful at this point to disclose numerical targets and performance indicators.
CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2009
2009 2008
£ £
Income
Income from financing and investing 3,774,911 12,785,855
activities
Returns to financial institutions and (450,117) (2,517,987)
customers
Net margin 3,324,794 10,267,868
Foreign exchange gains 91,340 805,985
Trading income 309,813 242,970
Fees and commissions - 787,143
Oil & gas gross loss (355,930) -
Total operating income 3,370,017 12,103,966
Expenses
Fair value loss on assets designated as (4,134,525) -
fair value through income statement
Provision for impairment of financing (6,351,575) (3,750,000)
arrangements
Provision for impairment of available (7,030,988) -
for sale securities
Impairment of goodwill (954,077) -
Staff costs (4,709,722) (5,016,059)
Depreciation and amortisation (405,596) (428,374)
Other operating expenses (2,657,533) (2,345,672)
Oil & gas overheads (824,715) -
Operating (loss)/profit before tax (23,698,714) 563,861
Tax 1,519,399 (1,091,533)
Loss for the year from continued (22,179,315) (527,672)
operations
Loss after tax for the year from discontinued operations - (14,285,451)
Loss for the year (22,179,315) (14,813,123)
Attributable to:
Equity holders of the Bank (22,013,425) (14,813,123)
Non controlling interest (165,890) -
Earnings per share
- basic and diluted (1.22p) (0.81p)
Continuing operations
- basic and diluted (1.22p) (0.03p)
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2009
Year to Year to
31 Dec 2009 31 Dec 2008
£ £
Loss for the year (22, 179,315) (14,813,123)
Other comprehensive income
Net change in fair value of available-for-sale 1,744,575 (3,890,474)
financial assets
Net amount transferred to profit or loss 1,322,950 -
Income tax effect on the changes of available - 1,108,785
for sale financial assets
Exchange difference on net investment in foreign 183,728 -
operations
Other comprehensive income/(expense) for the 3,251,253 (2,781,689)
period, net of income tax
Total comprehensive expense for the year (18,928,062) (17,594,812)
Attributable to:
Owners of the Bank (18,785,201) (17,594,812)
Non-controlling interest (142,861) -
(18,928,062) (17,594,812)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2009
2009 2008
£ £
Assets
Cash and balances with banks 685,495 972,540
Due from financial institutions 120,295,974 144,365,892
Financing arrangements 11,250,000 28,390,180
Available for sale securities - Sukuk 23,496,214 56,559,347
Available for sale securities - Equity 127,817 -
Financial assets designated at fair value 750,438 4,884,963
Fair value of foreign exchange agreements 30,091 20,012
Investment property - 38,699,245
Plant and equipment 191,061 293,107
Intangible assets 415,512 683,261
Oil & gas properties 7,032,334 -
Other assets 1,747,471 1,975,217
Current tax asset 955,973 815,076
Total assets 166,978,380 277,658,840
Liabilities
Due to financial institutions 21,273,067 107,084,431
Due to customers 1,009,533 2,728,522
Fair value of foreign exchange agreements 539,811 1,924,178
Other liabilities 2,837,556 2,504,209
Deferred tax liability - 60,212
Total liabilities 25,659,967 114,301,552
Shareholders' equity
Share capital 17,656,585 18,255,625
Share premium account 116,219,800 164,229,939
Capital redemption reserve 599,040 -
Fair value reserve (161,161) (3,228,686)
Foreign exchange reserve 160,699 -
Retained earnings 5,903,845 (15,899,590)
Total equity attributable to the Bank's equity 140,378,808 163,357,288
holders
Non-controlling interest 939,605 -
Total equity and liabilities 166,978,380 277,658,840
Adnan Yousif Keith McLeod
Chairman Acting Chief Executive Officer and Finance Director
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED
31 DECEMBER 2009
Share capital Share premium Capital redemption Special reserve Fair value reserve Forex reserve Retained earnings Non controlling Total equity - Group
account reserve interest
£ £ £ £ £ £ £ £ £
Balance at 1 January 2008 18,255,625 164,229,939 - - (446,997) - (1,119,160) - 180,919,407
Share award - - - - - - 32,693 - 32,693
18,255,625 164,229,939 - - (446,997) - (1,086,467) - 180,952,100
Unrealised loss on available (3,890,474) - - - (3,890,474)
for sale investments
Tax effect adjusted 1,108,785 - - - 1,108,785
Loss for the year - - (14,813,123) - (14,813,123)
Total comprehensive loss for (2,781,689) (14,813,123) - (17,594,812)
the year -
Balance at 31 December 2008 18,255,625 164,229,939 - - (3,228,686) - (15,899,590) - 163,357,288
Balance at 1 January 2009 18,255,625 164,229,939 - - (3,228,686) - (15,899,590) - 163,357,288
Creation of special reserve - (48,010,139) - 48,010,139 - - - - -
Redemption/ repurchase of (599,040) - 599,040 (4,193,279) - - - - (4,193,279)
shares
Non controlling interest - - - - - - 1,082,466 1,082,466
arising on business -
combinations
17,656,585 116,219,800 599,040 43,816,860 (3,228,686) - (15,899,590) 1,082,466 160,246,475
Net unrealised profit on 1,744,575 - - 1,744,575
available for sale securities -
Impairment losses on available 1,322,950 - - 1,322,950
for sale investments
transferred to income
statement
-
Loss for the year - - (22,013,425) (165,890) (22,179,315)
Foreign exchange adjustment - 160,699 - 23,029 183,728
Transfer from Special Reserve (43,816,860) - - 43,816,860 - -
Total comprehensive loss for 3,067,525 21,803,435 (142,861) (18,928,062)
the year (43,816,860) 160,699
Balance at 31 December 2009 17,656,585 116,219,800 599,040 - (161,161) 160,699 5,903,845 939,605 141,318,413
CONSOLIDATED STATEMENT OF CASH FLOW FOR THE YEAR ENDED 31 DECEMBER 2009
2009 2008
Notes £ £
Cash flows from operating activities
Operating (loss)/profit on
- continuing activities before tax (23,698,714) 563,861
- discontinued operations - (14,285,451)
Adjusted for:
Provision for impairment of the 31 - 14,705,914
property portfolio
Provision for impairment of financial 14,336,640 3,750,000
assets
Net loss on investment securities at 4,134,525 -
fair value through
income statement
Depreciation and amortisation 18,19 405,596 722,460
Charges for share awards 8 - 32,693
Net (increase)/decrease in operating
assets:
Collateral deposits - 235,732
Due from financial institutions 24,069,917 53,405,223
Financing arrangements 10,788,605 (7,105,241)
Available for sale securities - sukuk 29,421,992 (26,129,769)
Available for sale securities - equity (127,817) -
Financial assets designated at fair value - (4,884,963)
Fair value of foreign exchange (1,394,446) 1,170,102
agreements
Investment property 31 38,699,245 -
Other assets 1,561,775 1,745,276
Net increase/(decrease) in operating
liabilities:
Due to financial institutions (85,811,364) (19,596,561)
Due to customers (1,718,988) (43,458)
Other liabilities (163,258) (2,087,890)
Taxation:
Corporation tax recovered/(paid) 785,471 (1,790,000)
Net cash inflow from operating activities 11,289,179 407,928
Cash flow from investing activities
Acquisition of subsidiaries, net of cash (7,347,144) -
acquired
Purchase of plant and equipment 18 (15,878) (28,478)
Purchase of intangible assets 19 (19,923) (51,756)
Net cash outflow from investing activities (7,382,945) (80,234)
Cash flow from financing activities
Redemption of shares (4,193,279) -
Net cash outflow from financing activities (4,193,279) -
Net (decrease)/increase in cash and cash (287,045) 327,694
equivalents
Cash and cash equivalents at the beginning 972,540 644,846
of the year
Cash and cash equivalents at the end of 685,495 972,540
the year
Notes to the consolidated financial statements for the year ended 31 December 2009
1 Segmental information
The Group has two reporting segments as at the end of 2009, the "Treasury and Capital Markets" division and the "Private Equity and Corporate Advisory" division, which are the Group's strategic business units ("SBU"). These SBU offer different products and services, and are managed separately based on the Group's management and internal reporting structure. A description of the activities of these divisions can be found in the "Operating and Financial Review" (page 6). For each SBU, the Group's management committees and the Board review internal management reports on a monthly basis.
The Treasury and Capital Markets unit became fully active in April 2006 following FSA authorisation. The majority of the cost base, and the assets and liabilities of the Bank have been deployed in support of that business unit. The Real Estate division was discontinued during 2009. The Private Equity and Corporate Advisory division was launched in 2008 and the division had made two investments by 31 December 2009.
Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit before tax and is reviewed by Group executive management and the board of directors. Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
2009 Treasury Real Private Equity
and Capital Estate and Corporate
Markets (Discontinued) Advisory Total
£ £ £ £
Revenue from external customers 4,176,064 1,991,000 69,884 6,236,948
Returns to external customers (450,117) (1,779,000) - (2,229,117)
Costs associated with Real Estate (212,000) - (212,000)
Gross loss of oil & gas - - (425,814) (425,814)
operations
Operating income 3,725,947 - (355,930) 3,370,017
Divisional loss before tax (13,851,082) - (8,952,999) (22,804,081)
Unallocated* (894,633)
Operating loss before tax (23,698,714)
Fair value movement - - (4,134,525) (4,134,525)
Impairment of assets (13,382,563) - (954,077) (14,336,640)
(13,382,563) - (5,088,602) (18,471,165)
Depreciation and amortisation (304,197) - (101,399) (405,596)
Segment assets 158,162,900 - 8,815,480 166,978,380
Segment liabilities 24,791,873 - 868,094 25,659,967
Capital expenditure
Plant and equipment 11,490 - 4,388 15,878
Intangible assets 13,947 - 5,976 19,923
*-Centrally incurred costs are allocated according to usage
2008 Treasury Private Equity
and Capital Real and Corporate
Markets Estate Advisory Total
(Discontinued)
£ £ £ £
Revenue from external customers 14,621,953 3,693,527 - 18,315,480
Returns to external customers (2,517,987) (2,555,972) - (5,073,959)
Operating income 12,103,966 1,137,555 - 13,241,521
Profit/(loss) before tax 2,926,301 (15,704,317) (943,574) (13,721,590)
Impairment of assets (3,750,000) (14,705,914) - (18,455,914)
Depreciation and amortisation (376,791) (327,478) (18,191) (722,460)
Segment assets 232,940,220 39,551,255 5,167,365 277,658,840
Segment liabilities 74,822,437 39,479,115 - 114,301,552
Capital expenditure
Plant and equipment 18,061 6,779 3,638 28,478
Intangible assets 46,910 3,205 1,641 51,756
2 Income from financing and investing activities 2009 2008
£ £
Due from financial institutions - murabaha and 1,376,022 7,487,206
wakala
Financing arrangements - murabaha 1,184,794 3,148,045
Available for sale investments - sukuk 1,214,095 2,150,604
3,774,911 12,785,855
3 Returns to financial institutions and customers 2009 2008
£ £
Due to financial institutions - murabaha and wakala 365,959 2,374,638
Due to customers - murabaha and wakala 84,158 143,349
450,117 2,517,987
4 Foreign exchange gains 2009 2008
£ £
(1,303,106)
1,976,086
Net gains/(losses) on translation of forward foreign exchange
agreements
1,394,446
(1,170,101)
91,340
805,985
5 Trading income 2009 2008
£ £
Available for sale securities - sukuk and equity 309,813 242,970
securities
6 Investments in subsidiaries
The Bank's subsidiaries as at 31 December 2009 are as follows:
Country
Company Principal Activity Control % of registration
EIIB InvestCo SPC * Limited partner 100 Bahrain
EIIB ServiceCo WLL * General partner 100 Bahrain
TriTech Capital Limited Oil & gas exploration 87 British Virgin Islands
* no business activities during 2009
The Bank's controlled entities as at 31 December 2008 were as follows:
EIIB Pan-European Islamic Real Estate Fund** Holding company 100 Cayman Islands
The House Limited** Real Estate 100 Cayman Islands
** disposed of in 2009
Investment in subsidiaries
2009
£
At 1 January -
Additions 8,153,134
Disposals -
Fair value loss during the year (1,808,132)
At 31 December 6,345,002
There was no movement in 2008.
6.1 Acquisition of a subsidiary
On 20 March 2009, as part of EIIB's Private Equity and Corporate Advisory activities, the Group obtained control of TriTech Capital Ltd (BVI) (and the entities incorporated as its subsidiaries, together the 'TriTech Capital Group'). Control was obtained by acquiring a shareholding in TriTech Capital Ltd (BVI) and entering into a shareholders' agreement that enables the Bank to appoint the majority of the directors to the board of the TriTech Capital Group companies.
The investment was structured via a financing facility with rights to convert the facility into equity shares at any time as determined by EIIB. EIIB's interest in TriTech for consolidation purposes is determined based on its effective interest in the net assets of the investee.
Identifiable assets and liabilities of TriTech Capital Group as at the date of acquisition:
£
Cash & bank balances 810,512
Oil & Gas assets 7,583,539
Other assets 252,938
Other liabilities (496,605)
Net assets 8,150,384
Non controlling interest (13.1322%) (1,070,326)
Total net assets acquired 7,080,058
Goodwill 954,077
Consideration satisfied by cash 8,034,135
There were no significant differences between carrying values and fair values at the date of acquisition.
Goodwill: £
Total consideration transferred in respect of financing facility 8,034,135
and equity share (all settled in cash)
Less: value of identifiable net assets (7,080,058)
Goodwill on acquisition 954,077
Impairment (954,077)
Balance -
Goodwill was created on acquisition as the cost exceeded EIIB's interest in the fair values of TriTech's identified net assets. The goodwill was impairment tested as at 31 December 2009 in compliance with IAS 36, evaluating the results so far and the possible outcomes. In line with the Boards' cautious approach on asset valuation management has decided to impair the goodwill.
The effective interest of EIIB and that of the Non-controlling interest:
The following table illustrates the effective interest of EIIB and that of the non-controlling equity contributors based on the IAS 27 which states that the proportion allocated is determined taking into account the eventual exercise of potential voting rights. Accordingly the financing facility is treated as an equity stake for consolidation purposes and to calculate the effective non-controlling interest.
Date % acquired by EIIB EIIB Non-controlling
cumulative % interest %
Initial drawdown of facility 20 Mar 09 82.58% 82.58% 17.42%
Second drawdown of facility 12 May 09 2.58% 85.16% 14.84%
Third drawdown of facility 11 Jun 09 1.70% 86.87% 13.13%
Had the acquisition date been 1 January 2009, the Group would have made a post-tax loss of £22.5m on its continuing operations. The Group's total revenue would have been unchanged.
The investment in the TriTech project is the second investment made by the business segment, 'Private Equity and Corporate Advisory' after its establishment in 2008.
6.2 Oil and gas properties
Oil and gas properties capitalised during the year are as follows. All these assets were acquired by the Group during the year as a part of the acquisition of TriTech Capital Group.
2009
£
Unproved intangible mineral interest
- Intangible drilling 2,426,991
- Intangible completion 1,075,590
- Prospect development 2,801
- Leasehold costs 2,656,517
6,161,899
Unproved property, plant & equipment
- Tangible 639,472
- Facilities 196,895
- Buildings 1,053
- Leasehold improvements 14,353
- Inventory 18,662
870,435
Total oil and gas properties 7,032,334
In accordance with IFRS 6 all oil & gas exploration costs are capitalised as intangible assets on acquisition. These are tested for impairment on a regular basis, based on the results of exploratory activity and management's evaluation thereof. No impairment allowances have been made against the oil & gas properties during the year.
7 Investment property The Bank's interest in the asset management special purpose vehicle, EIIB Pan-European Islamic Real Estate Fund (the Fund), which held a UK commercial real estate property portfolio through its investment in The House Limited (THL) was sold to a third party in December 2009 for negligible consideration.
The Fund was established on 22 November 2006, and the property portfolio was acquired on 18 April 2007. The acquisition of the properties was financed by a third-party financial institution on a murabaha basis and the Bank via a bridging facility. The Bank owned 100% of the management shares in the Fund, there being no other equity shares in issue. In turn the Fund owned 100% of the equity shares of THL, the company which owns the properties. Both the Fund and THL are registered in the Cayman Islands. As a result of the nature of the relationship between the Bank and the Fund, the requirements of IAS 27 and Standard Interpretation Committee (SIC) 12, the results of the Fund and the underlying property portfolio were consolidated with those of the Bank in 2008.
Following a breach of a covenant in 2008 the third-party financial institution appointed an administrator to take over all the properties of THL. The property activities were accounted for under IFRS 5 "Discontinued operations" in the Bank's interim financial statements as at 30 June 2009. The fund was sold in December 2009 and was therefore deconsolidated as at 31 December 2009. The Group's reported loss on THL activities of £7.1m in its June 2009 interim financial statements has therefore been offset by an equivalent profit arising following the disposal of the Fund.
The Bank's consolidated statement of financial position for 2008 recognised the properties in accordance with the requirements of IAS 40. Accordingly these properties were carried at original cost less depreciation and were impairment tested for reporting purposes. The Group estimated the recoverable amount for this purpose. The recoverable amount of an asset is the higher of its fair value less cost to sell, and its value in use. Value in use is the present value of future cash flows from the assets discounted at a rate that reflects market returns adjusted for risks specific to the assets. When the recoverable amount of an asset is less than its carrying value, an impairment loss is recognised immediately in profit or loss and the carrying value of the asset reduced by the amount of the loss. The value in use of the property portfolio as at 31 December 2008 was £38,699,245.
As the Bank had provided junior financing to THL via the Fund, an impairment provision of £14,285,451 was charged against the income statement in 2008.The following items in the income statement and balance sheet relate to the Fund and THL:
2009 2008
£ £
Rental income 1,991,000 3,693,527
Returns related to the property portfolio * (1,779,000) (2,555,972)
Foreign exchange gains and losses - -
Operating expenses of the property portfolio (212,000) (423,006)
Depreciation - (294,086)
Provision for impairment of the property (7,084,020) (14,705,914)
portfolio
Disposal of property portfolio 7,084,020 -
Total loss relating to the property portfolio - (14,285,451)
*Murabaha returns on due to financial institutions.
2009 2008
£ £
Balance brought forward 38,699,245 53,699,245
Depreciation - (294,086)
Provision for impairment - (14,705,914)
Disposal of property portfolio (38,699,245) -
Balance carried forward - 38,699,245
The financial information included within this document does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2009 were approved by the directors on 9 March 2010. These accounts will be published on 1 April 2010 after which they will be delivered to the Registrar of Companies. The report of the auditors on these accounts was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not include a statement under section 498 of the Companies Act 2006.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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| 13-01-10 | RNS |
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RNS Number : 5023F European Islamic Investment BankPLC 13 January 2010 13 January 2010 European Islamic Investment Bank plc ("EIIB" or the "Company") Director Shareholding The Company has been informed that, further to its announcement on 25 November 2009 in relation to the result of its tender offer, Mr. Abed Alzeera, a Non-Executive Director of the Company, tendered 400,000 ordinary shares of 1p each in the capital of the Company ("Ordinary Shares"). As a result, Mr. Alzeera now has no direct beneficial or non-beneficial holding of Ordinary Shares. These shares were acquired by Mr. Alzeera on 23 May 2006 at a price of 13.5p per share. In the circular sent to shareholders on 28 October 2009 it was stated that "The Directors have confirmed that they intend to vote in favour of the Resolutions and do not intend to tender their holdings of Ordinary Shares in the Tender Offer". Mr. Alzeera has confirmed to the Company that, pursuant to that intention, he did not give any instructions to tender any of his holding. The Company has been advised that the tender was made due to an administrative error by the nominee company that held the shares on his behalf and Mr. Alzeera was unaware that his shares had been tendered until after completion of the tender offer and hence it could not be corrected. Enquiries:
Keith McLeod, Interim Chief Executive Officer
Bobbie Hilliam This information is provided by RNS The company news service from the London Stock Exchange END
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On 30 March 2010 Esterad's AGM, Mr Benkhadra will be voted-in as a new member of the board of Esterad. (announced 11 march 2010)
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in the RNS of 10 March 2010 (unaudited final results), EIIB stated that the audited Annual report would be published on the 1 April 2010.
The audited report has been published today, 2 weeks ahead of the announcement. http://www.eiib.co.uk/documents/annual-report-2009-final.pdf An AGM could be as soon as mid April. For whatever reason EIIB is accelerating events. |
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they don't bother updating their website, for a while now.
I think EIIB will be taken-over/merged. Estirad's international investments are done through third parties. EIIB could/would provide Esterad the expertise of an already running international investment bank. imho, Appointing Mr Benkhadra is a done deal. |
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The new CEO has made a promising start announcing the JV between EIIB and Esterad. There has been more positive news coming out of EIIB on his first day than for a long time previously. The rot had set in long before Weguelin stepped down. Maybe he can shake up the cobweb-covered staff into doing some work, generating some revenue and giving some return on shareholder investment. You only need to look the short distance across London to BLME who were set up after EIIB but are outperforming them in a very short space of time.
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The contents of the postings summarised here represents the opinions of the authors and not of Interactive Investor Trading Limited.
They have not been approved or issued by Interactive Investor Trading Limited.
They have not been approved or issued by Interactive Investor Trading Limited.
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