Islamic bank for Abu Dhabi free zone being set up

Abu Dhabi Financial Group (ADFG) and Bahrain’s GFH Financial Group are jointly setting up an Islamic bank in Abu Dhabi’s new financial free zone with initial capital of US$100 million, ADFG’s chief executive said on Monday.

The privately-owned investment management firm ADFG and GFH have received preliminary approval to launch the bank at Abu Dhabi Global Market (ADGM), the second financial free zone in the UAE after the Dubai International Financial Centre (DIFC).

It will be the first new bank set up at the recently launched ADGM, which has so far attracted Aberdeen Asset Management and Macquarie Capital to open offices.

“The bank will be opening very soon, it will be run as a commercial bank accepting offshore deposits and dealing in dollars,” the ADFG chief executive Jassim Alseddiqi said.

He added ADFG plans to have its own presence in the financial free zone, declining to give further details.

ADFG recently raised its stake to 11.74 per cent in Islamic investment bank GFH from 10 per cent, and Mr Alseddiqi said the two firms were seeking other joint opportunities.

ADFG is best known outside the emirate for its £370m (Dh1.9 billion) purchase in December 2014 of New Scotland Yard, the former headquarters of London’s Metropolitan Police, as well as developing luxury flats at a plot next to Buckingham Palace in the British capital.

The firm, which has built up $3.5bn of assets under management since it was set up in 2010, predicts that this figure will double by the end of this year and trebling by 2020, according to Mr Alseddiqi, as it pursues a number of new investments.

“There are several deals [in property and financial services] in the pipeline we are working on, as when activities slow, we thrive,” he said, adding, “expect the second half of this year to be more active”.

The firm is eyeing acquisitions at home as well as abroad, including in eastern Europe, where it already has investments. But it has no specific investment target in terms of value.

“We have the firepower. If we find opportunities for $2bn we will invest, but if we don’t find [anything], it will be zero investment,” Mr Alseddiqi said.

ADFG’s capital markets arm, Integrated Capital, which acted as co-lead in the $500m bond issued by Etihad Partners last week, will play a similar role on an upcoming regional sukuk offering for a financial group, Mr Alseddiqi said, declining to name the firm as it is a listed entity.

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