KUWAIT CITY (Agencies): Kuwait's Investment Dar, expects a profit rise in 2008 despite a slight second-quarter decline, it said on Tuesday, as the Islamic bank expands by setting up units in London and Dubai. Shares of Dar, which owns half of British luxury carmaker Aston Martin, jumped as much as 5 percent after it said second-quarter net profit eased by 0.3 percent to KD 50.7 million ($190.6 million).
This topped the KD 42.80 million Global Investment House had forecast in a Reuters survey. In the same period last year Dar had made a profit of KD 48.7 million by selling a company. Executive Vice-President Amr Abou El-Seoud told Reuters profit was driven by Dar's main operations, but did not elaborate. Apart from Aston Martin, Dar has set up an Islamic bank in Bahrain, is a major shareholder in Kuwait's Boubyan Bank and like its main rival Kuwait Projects Co (KIPCO) owns stakes in companies around the Middle East. "Actually, Dar has done very well. They didn't sell anything substantial this quarter," said Bikash Rout, a financial analyst at Global. "Their own revenue stream is becoming robust."
Decline
Assets under management grew to KD 1.44 billion at the end of June, up 9.1 percent from the previous quarter. "We don't expect to have a decline by year-end. The overall performance is expected to be growth," Seoud said. He declined to give a precise 2008 outlook for the group, which invests according to Islamic law. Like bigger local rival KIPCO, which had assets of KD 4.83 billion at the end of June, Dar is tapping growth in other markets to diversify its revenue sources. Dar is setting up an Islamic bank in London to offer advisory services which could start operation as early as October. "We are still on track, we are in the very final (stage) for that and I think ... by the beginning of the fourth quarter we will be fully operational," he said, adding the startup capital would be about £50 million ($97.8 million).
Dar is also in talks to set an investment bank in Dubai by the fourth quarter of this year, he said. The London lender would serve clients in Europe and the United States interested in businesses complying with Islamic law, which bans interest, while the Dubai bank would focus on Asia and North Africa, Dar said in a statement.
Dar also owns a 12.5 percent stake in Syria's Cham Bank which it is close to selling to Commercial Bank of Kuwait, an official at Dar told Reuters last month.
Dar is not looking to buy a stake in German tyre-to-brakes firm Continental which is trying to fend off a hostile bid by German ball-bearing firm Schaeffler. "We have not considered Continental as a possible deal for Dar," Seoud said.
Dar's shareholders' equity increased 6.5 percent to KD 406.83 million in the first half from a year earlier.
Earnings per share were 53.62 fils in the second quarter, compared with 53.86 fils in the same period a year earlier. There are 1,000 fils to the dinar.
Net income in the first half came in at KD 95.95 million, including KD 15.04 million of unrealised profit on investments, it said.
The stock closed at 820 fils, up 2.5 percent.
Reflect
Much of the company profits reflect its broad activities in asset management, direct investment, banking business, and arrangement for large scale financing, said DIC board chairman and managing director Adnan Al-Mesallam. The company, he said, did well last year in arranging financing for some of its customers to the tune of half a billion dollars; it also offered consultations on company mergers and acquisitions to the amount of at least one billion dollars. He further said that DIC was quite active in facilitating credit and financing instruments to its customers while offering them novel ways at hedging investments against volatile market conditions, all in an Islamically-compatible manner. The chairman affirmed his company's keenness to make its mark in the Islamic banking field through three banks it operates. DIC has a bank in Bahrain, another being currently prepared for opening in London, and still another due to open soon in Dubai. DIC is considered among the foremost Islamically-compatible investment companies that is listed on the GCC stock markets and is quickly making itself felt in many regional and international markets, said the chairman.
© Arab Times 2008
