Higher income from long-term investments in 1997 contributed to an increase in net income at Dar al-Mal al-Islami Group (DMI), which operates a global network of Islamic institutions. The group recorded net profits of $14.3 million, an increase of 42 per cent on $10.1 million in 1996.

Consolidated total assets decreased by 4 per cent to $886.8 million. The balance sheet shows a shift from short- term to long-term investments, which the group says is aimed at improving profitability. The long-term investment portfolio, which consists mainly of investments in financings, equities and investment properties, expanded by 21 per cent to $295 million and generated income of

$35.9 million, compared with income of $14.5 million in 1996. However, the short-term investment portfolio continued to generate the highest proportion of operating income at 35 per cent, or $60.3 million.

Total funds under management, most of which are treated as off-balance sheet items, increased by 7 per cent during the year to $3,528 million.

DMI has continued to reorganise its operations to strengthen the group in the face of increasing competition in the field of Islamic finance. During 1997, DMI's fully-owned subsidiary Faisal Finance (Denmark) was liquidated. The group invested $9.4 million in a rights issue by Faysal Islamic Bank of Egypt, and in early 1998 invested a further $12.7 million, increasing its stake in the Egyptian subsidiary to 26.8 per cent.

In his report for 1997, chairman Mohamed al-Faisal al-Saud says the group plans to focus its activities on those subsidiaries that already enjoy a good market position and offer further business potential for future growth. It also aims to maximise synergies among the subsidiaries, he says.