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05 / 04 / 2016

Seera Reports $2.8 Million Net Profit for 2015

(Manama, 5 April, 2016) Seera Investment Bank B.S.C.(c), a Shari’a compliant investment bank headquartered in Bahrain announced its results for the year ended 31st December 2015, reporting net profit attributable to shareholders of $2.8 million for the year compared to a loss of $52.3 million for the previous year. The net profit attributable to shareholders for the fourth quarter 2015 was $2.4 million compared to a loss of $24.6 million for the same quarter last year. The increase in income is mainly attributable to fees on the acquisition and structuring of new investments and gains from exits completed during the year.

As reported in the published summary financial statements, total assets of the Bank as of 31st December 2015 stood at $169.1 million. Investment in Ijarah Assets, representing Seera’s investment in Falak Aviation Fund, has declined to $74.1 million compared to $119.3 million in the previous year. This decline represents a significant de-risking of the Bank’s aviation portfolio from 11 aircraft in 2007, to 3 aircraft at present. These disposals are a result of Seera’s focused strategy to reduce its exposure to the aviation sector following the 2008 financial crisis.

Mr. Hamad Al Ameeri, Seera’s Chairman of the Board of Directors commented “Seera’s strategy to de-risk its exposure in the aviation sector together with exits from a number of other investments has strengthened the Bank’s balance sheet and enabled it to end the year with liquid assets of $43 million and a Capital Adequacy ratio of around 27%, providing a strong platform for continued growth.  Furthermore, the Bank’s liabilities at end of the year reduced to $21.4 million compared to $56.8 million in the previous year, primarily from the repayment of the debt on various aircraft from sale proceeds.”

Mr. Al Ameeri added “During 2015, Seera has continued to extract value from its existing investments and at the same time continued to grow its business through new transactions.  During the year the Bank has successfully exited from a number of investments and significantly de-risked the aviation portfolio and completed new transactions.”

Providing further detail on the exits during the year Mr. Al Ameeri stated “In February 2015 the Bank successfully exited from the Shari’a compliant financing provided for the development of a UK Student Housing project in London generating strong returns for our investors and in June the sale of Kosan Crisplant, a private equity investment in Denmark, was completed.  Seera’s Falak Aviation Portfolio which at the beginning of 2015 comprised of 7 aircraft was reduced to only 3 aircraft at the end of the year through selective disposals.”

Abdulla Janahi, Seera’s Chief Executive Officer commented on Seera’s new investments “During the early part of the year the Bank’s investment in the development of dementia care homes in the UK was very well received by our investors. The project is ahead of schedule and planning permission was obtained 9 months ahead of schedule.” He further added “In December, Seera together with another local institution successfully completed in a US Multifamily transaction comprising of two properties located in Atlanta. The portfolio has an occupancy of around 95% and is projected to offer attractive risk adjusted returns for Seera and its investors over the investment holding period.”

Looking ahead Mr. Janahi added “Although global and regional markets are currently impacted by low oil prices, there are positive indications that the current situation will not persist for long with many analysts expecting improvements to happen towards the end of the year. The general message from various market experts is that of ‘cautious optimism’, due to positive momentum in developed economies which will continue to benefit from relatively lower oil prices. With this in mind, Seera will, continue to selectively identify opportunities in its target markets. A number of potential investments are already in the pipeline and are expected to be completed during the next few months. In addition, the Bank will continue to opportunistically exit from certain existing investments and a number of such exits are being explored.”

Seera has investments in the transportation and real estate sectors in addition to smaller investments in the utilities and energy sectors. The Bank’s investment strategy is to maintain a diversified investment portfolio geographically and industry wise, focusing on sectors underpinned by strong fundamental demand, and to avoid speculation driven sectors.

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