By David Ingham
Product diversification and expansion outside the UAE are on the cards for the recently listed Islamic finance company.
Newly listed Amlak Finance is looking forward to the opportunities that conversion to an Islamic finance company can bring.
Whilst mortgage finance will always be at the heart of Amlak’s business, the company is looking forward to creating other products based around the home and exploring opportunities in project finance.
“The core of our business will always be what has made us successful. But the fact that we are now an Islamic finance company allows us, if opportunities come around that give us a good return, to take them,” says Mohammed Ali Al Hashimi, chief executive officer, Amlak.
“The recent extension into auto insurance was a natural extension to our business. We plan to do other things based around the whole idea of the home.”
The company still isn’t giving much away about what form its expansion will take, but Al Hashimi does drop a few clues.A recent agreement with Sudan Telecommunications Company (Sudatel) saw Amlak contribute $3 million to a $40 million syndicated finance facility agreed with a number of financial firms. Expect similar deals in future.
“I wouldn’t say we’d be lead investors or put significant chunks of capital into deals,” says Al Hashimi. “However, we’ll always look at participation alongside other institutions.”
Further projects outside the UAE are also very much on the cards. “Our objective is to be focused on what’s going on in the market. We’re looking at real estate and non real estate, and we’re looking at various opportunities, not only in the UAE,” explains Al Hashimi.
Surprisingly, Al Hashimi says he has not talked with the promoters of the Pearl, a US $2.5 billion freehold development in Qatar, about providing mortgage finance to buyers there.
If Amlak shows one thing, it is how much desire there is amongst GCC nationals to invest in Islamic finance ventures.“The biggest hurdle that a finance company today faces in the market, particularly one that’s growing at the pace we are, is the ability to fund your business going forward,” Al Hashimi explains.
“The reason to go Islamic was that while we were talking to a number of investors about going public, the view was [very positive], but a number of institutions saw the words interest rate and said they couldn’t touch us.”
Thus, the company decided it would convert itself into an Islamic financial institution, so that it could attract more GCC capital and reach new markets.
“We realised that as a conventional institution we were cutting out one sector of the market, both customers and investors, says Al Hashimi.
“If we went Islamic, we could still do what we’re doing now, but open up new avenues as well.” Islamic finance, he continues, is “where the financial markets in this region are heading.”