November 23, 2005
Shamil Bank’s FX Modaraba Is Launched

Shamil Bank and Deutsche Bank AG recently signed an agreement in Bahrain for the launch of Shamil FX Modaraba. Seen on the occasion (from left to right) are Mohamed Hussain, Chief Executive , Shamil Bank; Nizar Al-Shubaily, Head of Global Islamic Banking, Deutsche Bank AG; Abdulhakim Al-Mutawwa, Head of Private Banking, Shamil Bank and Ahmad Tayara, Head of Investment Banking, Shamil Bank.

Shamil Bank has announced the launch of the Shamil FX Modaraba, an innovative, Sharia’a-compliant, capital protected, product investing in currency linked instruments in collaboration with Deutsche Bank AG, a leading global investment bank.

The Shamil FX Modaraba provides investors the potential for achieving attractive risk-adjusted returns based on a one year investment in currency-linked Morabahas with 100% capital protection.

Shamil Bank, as Modareb, will raise a minimum capital of US$ 20,000,000 from investors to invest in transactions involving commodity trades in association with Deutsche Bank AG where the underlying returns will be based on Euro / US dollar rate fluctuations.

Mr. Abdulhakim Al-Mutawa, Head of Private Banking at Shamil Bank said that “the Fund provides an attractive investment opportunity that is 100% capital protected, Sharia’a compliant and provides attractive returns if the Euro / US dollar rate remains within a pre-defined range within a one year period. The Fund’s potential for achieving an absolute return of 12% at the end of the one year subscription period is a rate that is more than double the current market rate for one year US Dollar investments. The minimum investment is US$ 10,000 with increments at a multiple of US$ 5,000 thereafter.”

He further added that the “investors will have the option to subscribe to two investment classes, each with a different expected return and risk profile.

Class A Investors are expected to earn a gross profit of approximately 12% per annum on their investment if the above Euro / US dollar trading range is maintained during the investment period. Class B Investors will earn a minimum return of 2.25% per annum regardless of the Euro / US dollar performance with an upside gross profit of 8.25% if the above Euro / US dollar range is maintained during the investment period. This minimum return is based on a portion of the Class B investment pool being invested in a one year Morabaha commodity trade with Shamil Bank. Both investment Classes benefit from 100% protection of invested capital.”

The Shamil FX Modaraba subscription period commenced on 15 November 2005 and will close on 14 December 2005. No redemption or early withdrawal shall be permitted.

Mr. Al-Mutawa said that the launch of this Fund is geared towards risk averse investors seeking short term returns looking to diversify their investment portfolio away from regional capital markets and real estate.

Mr. Nizar Al-Shubaily, Global Head – Islamic Finance, Deutsche Bank AG said that his bank has developed a range of Sharia’a-compliant products which provide Islamic investors with exposure to different asset classes on a principal protected basis.

Adding to Mr. Al-Shubaily’s comment Mr. Ahmad Tayara, Head of Investment Banking at Shamil Bank declared that Shamil will be proactive in teaming up with reputable financial institutions in order to provide a wide array of Sharia’a-compliant financial products to Shamil customers.