Aug 12 London-based Gatehouse Bank is developing
new business lines and widening its investor base as the Islamic
wholesale lender looks to build a more stable revenue stream,
its chief executive said.
Gatehouse, one of Britain's six full-fledged Islamic banks,
is joining several of its peers in broadening its scope, after
the country's Islamic finance sector got a boost from the
government's first issue of an Islamic bond in June.
The bank remains focused on real estate in Europe and the
United States but wants to expand its investor base beyond
Kuwait, its traditional source of funds, while generating more
deals outside the British property market.
Among its competitors, Islamic Bank of Britain is building
its commercial property business after a capital injection in
February from Qatari parent Masraf Al Rayan.
European Islamic Investment Bank is seeking to
develop its asset management and advisory services, while
exiting higher-risk private equity investments.
Last year, Bank of London and the Middle East
listed its shares on the Nasdaq Dubai bourse to help it grow
business links in the wider Gulf region.
Gatehouse, a subsidiary of Kuwaiti firm Securities House
, has $2.2 billion in assets under management, up from
$1.6 billion a year ago, while profits grew 65 percent in 2013.
However, fee and commission income dropped more than
two-thirds during last year, partly because of lower deal
activity in Britain.
New chief executive Henry Thompson, who joined in April this
year, says he wants to reduce the bank's dependence on
transaction fees. "The focus for me is to develop and diversify
the origination capability and grow the distribution placement
Gatehouse made no investments in the British market in 2013
as no opportunities fit its criteria, while it exited seven
deals. Revenue from financing and investment activities
compensated for the drop in fee income.
"In terms of predictable, secure and recurring income, this
is one of the objectives of the real estate finance line of
business, where our appetite is for initially senior first-lien
financings on real estate in Europe."
The bank also plans to launch an online retail deposit
product in December and is considering structuring private
investment funds, Thompson added. The objective of such funds
would be "to raise discretionary money that can be deployed at
the right time rather than raise money for a specific deal".
Gatehouse will consider joint ventures similar to last
year's agreement with property developer Sigma Capital to build
rental homes in Britain. Thompson expects the first phase, worth
100 million pounds ($168 million), to close by mid-August.
Last year Gatehouse opened a representative office in
Malaysia. "We are looking at the Malaysian strategy and we will
decide by the end of the year on the alternatives we have -
either to maintain the rep office if that is our requirement, or
to apply for a different category of licence."
(Editing by Andrew Torchia)