Macquarie Adds Islamic Finance And Trading Capability

Post by Sharat on August 26, 2009 · Under Business News, Company News, Mergers & Acquistions, banking · Comment

Australian investment banking major Macquarie Group has entered into a joint venture with a leading Islamic investment bank as it seeks to increase its Sharia compliant offerings and expand its foot print in the Middle East.

Macquarie’s joint venture with Bahrain based Gulf Finance House (GFH), is a feather in the cap of GFH’s new Chief Executive Ahmed Fahour, a former senior executive with, and one time contender for the top spot at National Australia Bank.

Though Macquarie has expanded aggressively in Asia and North America, it has remained relatively low key in the Middle East, despite rival investment banks ramping up their wealth management and investment banking capabilities in the region.

In 2005 Macquarie lent its expertise to a joint venture in treasury services with Abu Dhabi Commercial Bank, which provided currency and interest rate trading facilities for the joint venture clients. Macquarie currently has about 50 staff in the Middle East.

The new joint venture with GFH will allow Macquarie to offer Sharia compliant financial products, give it increased access to markets in the Middle East and eventually give it the ability to start trading regional equities.

The deal allows GFH to leverage its clients giving it the ability to offer them broader banking advisory services with a much larger global footprint.

”The strategic partnership with Macquarie represents an exciting opportunity as we look to continue the bank’s diversification into new geographies and opportunities,” Mr. Fahour said yesterday.

Mr. Fahour is embarking on a strategy of building the first truly global Islamic investment bank though GFH, and wants the ability to offer a full suite of products and services that are Sharia compliant.

The deal still requires shareholder approval will be structured as a sale of a US$100 million convertible bond in GFH to Macquarie.

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