DMIT_Annual_Report_2018_EN

Dar Al-Maal Al-Islami Trust 6 Ithmaar Holding BSC. FBL achieved a net profit after tax of PKR 4.8 billion ($39.6 million) in 2018, compared with PKR 4.5 billion ($42.7 million) in 2017, an increase of 7%. The exchange rate of PKR against the US Dollar fell from 110.56 in December 2017 to 139.80 by end of 2018. FBL’s result was the achievement of timely and effective measures taken for maintaining core revenue in line with improvement on banking spreads and profitability. Total assets registered an increase of 21% from PKR 494 billion ($4.4 billion) at 31 December 2017 to PKR 599 billion ($4.3 billion) at 31 December 2018. During the year, FBL made concentrated efforts to acquire low cost CASA deposit (current and saving accounts), resulting in an increase in CASA by 12.6% from PKR 261 billion ($ 2.4 billion) to PKR 294 billion ($2.1 billion) in 2018 - achieving CASA ratio of 69.6%. Similarly, total deposits registered an increase by 10% over 2017, from PKR 372 billion (US$ 3.9 Billion) to PKR 409.4 billion ($3.4 billion). In line with the growth strategy of FBL, retail banking reorganised its management structure and distribution networks to strengthen and optimise growth. In 2018 FBL successfully implemented automated Obligor Risk Rating and Facility Risk Rating models. Branch Led model was initiated for levering the strength of distribution networks, for promoting commercial and SME business. In the light of series of measures taken by FBL during 2018, FBL maintained stable outlook long and short term credit ratings of AA and A1+, respectively, as reported by two reputable local rating agencies. During 2018, FBL opened 50 new branches to achieve a network of 455 branches of which 254 (56%) are dedicated to Islamic banking. FBL will continue its horizontal growth in branch network to provide easy access to customers. These branches will not only generate low cost core deposits but will also improve the current and saving accounts mix, with the goal of reducing the average cost of funding as described above. FBL continues to focus on expanding development of new innovative Islamic products, aiming to attracting more low cost deposits and increasing cross-selling and benefiting from its asset management arm; Faysal Asset Management Ltd. With the new business structure at FBL, future strategy will continue to focus on Islamic finance which enjoyed a successful year, taking lead role in a number of syndications and big-ticket transactions. The Bank is confident that synergies will be captured and expectations of its shareholders will be met. Reflecting FBL’s commitment to provide a better, easier and seamless customers experience, FBL has initiated a comprehensive digital strategy, implementing a new online banking platform, with rapid yet well planned expansion in branch network. Islamic Investment Company of the Gulf (Bahamas) Limited (“IICG”), DMI’s wholly owned subsidiary, reported a net profit of $14.8 million compared with $ 8.7 million in 2017. Shareholder’s equity in 2018 increased to $63 million compared to $48 million in 2017. IICG’s total assets increased by 14%, from $87.9 million in 2017, to $99.8 million in 2018. On conservative ground, a sum of $11.3 million has been transferred to Contingency Reserve. IICG’s Funds Under Management amounted to $ 2.09 billion in December 2018, a marginal decrease of 4% from $ 2.10 billion in 2017, due to partial redemptions. Following the directives of the regulatory authorities in the Kingdom of Saudi Arabia in 2015, IICG is in a process of liquidating its Modarabas in this country. All assets are under liquidation and distributions to investors, are made proportionately. Since 2016 four distributions have so far been made to the investors, equivalent to 8% of investors’ equity. As the liquidation of the assets progresses, further repayments of Modarabas capital, will be made as and when more assets are liquidated. The overall Group risk in respect of Funds Under Management does not appear to have been worsen since last year. IICG’s 73% owned subsidiary, Gulf Investors Asset Management Company (“GIAMCO”), a Saudi closed joint stock company registered in the Kingdom of Saudi Arabia, recorded a net loss of $1.8 million in 2018 compared to a net loss of $ 2.6 million in the previous year. Total Funds Under Management as at December 31, 2018 amounted to $ 86 million (2017: $86 million). On strategic basis, the Group decided to liquidate GIAMCO’s 3 real estate funds during 2019. Faisal Islamic Bank of Egypt (“FIBE”), 49% owned by the Group’s managed funds, achieved a remarkable results in 2018. At an all-time high since incorporation in 1981. The exchange rate for L.E. against the US