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3 Feb 2009 07:00
European Islamic Investment Bank Plc
3 February 2009
Trading update
European Islamic Investment Bank Plc ("EIIB"), the Sharia'a compliant investment bank, today issues the following trading update in advance of its results announcement for the year ended 31 December 2008 which is due to be released on or around 27 February 2009.
Property Revaluation
It has been well documented in the media that the UK's Commercial Property Sector has suffered a severe decline with the IPD Index of UK Property declining by 18% during the second half of 2008 (22% decline for the full year 2008). EIIB commissioned CBRE, property valuers, to undertake a valuation of the Group's property portfolio and based on this valuation the Board of EIIB are of the opinion that the value in use of the portfolio (which is the basis on which the assets are held on the balance sheet) is not less than £39.0m (Fair Value of £36.3m) resulting in an impairment provision of approximately £15m being recorded for the financial year ended 31 December 2008.
Murabaha Financing
In keeping with our careful and prudent approach, Management continually reviews EIIB's portfolio to assess the performance and recoverability of each financing. This is particularly important in the current economic climate.
The circumstances of one particular obligor are such that the ultimate recovery of the full amount of the financing (made under a murabaha agreement) is in doubt. Whilst we are actively working with the obligor to resolve this situation, the Directors of EIIB believe that an impairment provision of approximately £3.75m is appropriate at this time.
Outlook for core operations
Other than the two items noted above, EIIB's core operations continue to trade profitably. The Directors believe that EIIB's strong capital base, supportive shareholder base, cautious approach to risk, and highly liquid balance sheet place EIIB in a strong position to take advantage of opportunities arising as a result of the current unprecedented economic environment.
Ends
For further information:
EIIB plc Tel: +44 (0)20 7847 9900
John Weguelin, Chief Executive
Keith McLeod, Finance Director
Evolution Securities Limited Tel: +44 (0)20 7071 4300
Chris Sim/Bobbie Hilliam
Fishburn Hedges Tel: +44 (0)20 7839 4321
Michelle James/Andrew Marshall
Notes to editors:
About EIIB
EIIB was incorporated in January 2005 and received its FSA authorisation in March 2006. It commenced business in April 2006 and completed its IPO and was admitted to London's AIM market in May 2006.
EIIB services a market for sharia'a compliant investment banking services in Europe, the Middle East and Asia. Sharia'a compliant banking is generally regarded as one of the fastest growing sectors in the financial services industry.
Headquartered in London, EIIB is a fully Sharia'a compliant investment bank that provides products and services in the following areas:
- Private Equity and Corporate Advisory
- Treasury and Capital Markets
- Asset Management
- Real Estate
- Sharia'a Advisory
The shareholders of EIIB include Gulf and European based individuals and institutions.
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