FIIB’s board has recommended that a dividend payment of $16.9 million be paid to shareholders. The figure represents a 15 per cent return on the bank’s share capital.
The bank attributes its 2002 performance to the decision to move away from its traditional focus on US equities into asset-based transactions and real estate.
‘We recognised at the end of 2001 that the appetite in the Middle East for US private equity was waning and so we changed our focus accordingly,’ Mounzer Nasr, FIIB chief financial officer, told MEED on 22 January. ‘Of the five deals we did, only one was US private equity and this was in the healthcare sector, which has not been as badly affected by the challenging economic environment as other areas.’
In a bid to diversify away from the US, FIIB completed its first European transaction in 2002, and signed a $142 million aircraft leasing deal. ‘Increasingly, investors in the region want yielding assets that pay a monthly and quarterly coupon,’ says Nasr.
The bank plans to continue with its policy of diversification in 2003 and is preparing a significant exit from its US private equity portfolio in the first half of the year. ‘The company in question has outperformed all projections and is in an industry which has avoided the worst of the downturn,’ says Nasr. ‘There will certainly be a demand for such an asset, and the sale is likely to take the form of a trade sale rather than an IPO [initial public offering].’
FIIB is also in the early stages of preparing for its first corporate bond offering. The bank is in discussions with HSBCand BNP Paribasover the possibility of the two investment banks acting as lead underwriters for the issue, which is expected to be worth $100 million-150 million.
‘We would like to launch a three-five year issue as soon as we have the structure approved by the relevant Sharia committees,’ says Nasr. ‘We are in discussions with the Bahrain Monetary Agency [central bank] over the tradability of the instrument, to see whether it can be listed on the Bahrain Stock Exchange or not.’