Aug 10 2009
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Credit crunch hastens Gatehouse Bank, GSH merger
The merger was in many respects forced by the prevailing global financial market conditions and once again by the huge costs of establishing and maintaining financial institutions in the City in London. There are legal and other reasons why Securities House had to go down the GSH route to establish Gatehouse Bank, the last Islamic bank to be authorized by the Financial Services Authority (FSA) in the UK.
The Islamic finance market however was always convinced that a merger was inevitable because having two institutions from the same financial stable whose activities had an element of both complimentarity and duplication, was in the medium-term unsustainable. The credit crunch and the global financial crisis merely hastened this inevitability.
The combined entity, stressed The Securities House in a statement, "will benefit from the strength of Gatehouse Bank in capital markets services and GSH UK's skills in asset and fund management, creating an even stronger business with which to approach the growing opportunities in Shariah-compliant financial markets, both in London and worldwide. "The two companies confirm that they have already worked together closely on a number of projects in the real estate sector and further opportunities have been identified in trade finance and liability risk management.
According to Richard Thomas, who has spent the last few days meeting his staff individually, Gatehouse Bank is "looking to the future with a sound platform already in place in the heart of the City of London. Gatehouse Bank has built an enviable depth of professional talent and a reputation for probity in matters of Shariah compliance while mobilizing that talent to deliver an award winning existing product range in a short time.
"I am delighted that our shareholder has the confidence to set us the task of now forging ahead into new markets with new products, combining the capital markets skills of Gatehouse Bank with the asset management skills of GSH UK.
We see strong opportunities for the Islamic financial services industry in Europe and the deepening of established markets such as Malaysia. We believe that from London we can best serve our clients and shareholders by building counterparty relations and strategic initiatives in these centers to complement our traditional strength in the GCC," he added.
By Mushtak Parker
© Arab News 2009
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