The Doha-based Islamic financial institution plans to increase its geographic reach
Date established 2006
Main business sectors Corporate, retail, investment and private banking
Main business regions Qatar, GCC, Asia
Chief executive officer Adel Mustafawi
Masraf al-Rayan structure
Founded in 2006, Masraf al-Rayan is a Qatar-based sharia-compliant financial institution offering the full range of banking services. It was incorporated in 2006, with a paid-up of $1.1bn, which by the third quarter of 2010 had increased to $1.39bn.
Since its inception, the bank has steadily expanded its operations, and now operates eight branches around Doha, with a head office in the Qatari capital. Its staff runs to 250 employees. Masraf al-Rayan is a listed company and its shares are traded on the Qatar Exchange.
The bank is 33 per cent owned by Qatari public sector entities. It also has a significant non-Qatari ownership. Masraf al-Rayan’s board of directors agreed in April 2008 to increase the non-Qatari shareholding in the bank to 49 per cent from the existing 31 per cent, at a future date.
Through its $100m-capitalised investment arm, the Qatar Financial Centre-based Al-Rayan Investment, it buys stakes in companies and invests in funds. Masraf al-Rayan also has interests in two other subsidiaries, Lusail Waterfront Real Estate Company and the Saudi-based Kirnaf Personal Finance Company.
|Masraf al-Rayan balance sheet (QRbn)|
|Loans and advances||13,326||17,750|
|Source: QNB Capital|
Masraf al-Rayan operations
Masraf al-Rayan offers a fully-fledged sharia-compliant offering, covering retail, corporate, investment and private banking. Investment banking operations are undertaken by Al-Rayan Investment, its wholly-owned subsidiary based at QFC. This unit has been active through 2010, launching earlier in the year a $1bn GCC Fund to invest in listed equities, fixed-income and money-market instruments in the Gulf.
Al-Rayan Investment announced plans in July to launch three funds focusing on both equity and debt markets in Qatar and Libya, Malaysia, Indonesia and Singapore. The investment banking arm also established a joint venture in June with Malaysia-based oil and gas services company, SapuraCrest Ventures. The new company SapuraCrest Qatar will aim to leverage the expertise of SapuraCrest Petroleum in Qatar’s booming oil and gas services sector.
In 2007, Masraf al-Rayan announced its first significant overseas move, with an expansion into the Saudi consumer finance sector, joining with major Riyadh investors to set up Kirnaf Investment & Installment Company. The firm offers home, car, education and goods financing to customers in the kingdom.
The bank is looking to boost its retail offering with innovative consumer-friendly products. This year, it launched the Al-Rayan Phone, a banking service that enables customers to access account information and carry out other banking transactions by phone.
Masraf al-Rayan’s corporate banking services cover the full range of activities, from capital restructuring to mergers and acquisitions, and project finance. Private banking is also a core focus, given the large number of high-net worth individuals in the GCC and Qatar.
The bank’s profitability is skewed towards corporate banking, which reported profits of QR713.9m ($196.3m) as of 30 September, compared to QR30.6m in retail banking and QR23.7m for its Al-Rayan Investment unit.
|Shareholders’ equity vs net profit|
|Source: QNB Capital|
Masraf al-Rayan ambitions
Masraf al-Rayan is aiming high, in line with the Qatari economy’s strong growth trajectory. Its founders established the bank with $1bn in capital to take on regional banks, and play a key role in helping to finance some of the big projects coming out of the region.
Its investment banking arm is already active in key growth markets in Middle East and North Africa and Asia.
Its private banking arm is also primed for increased activity. Going forward, wealth management will become a core focus for the bank, as Qatari and GCC residents grow richer on the back of high oil prices and robust state spending. However, the bank points out that corporate and retail banking will remain critical parts of its business.
New branches are planned for Qatar, but the bank also has a wider geographic plan. Masraf al-Rayan sees the GCC and Southeast Asia as its main future growth markets, and it is seeking out a position as a bridge between these regions.