The Ithmaar bank is interesting from the point of view of commercial architecture because it represents Islamic finance. Ithmaar Bank was incorporated into the Kingdom of Bahrain in 1984 initially under the name Faysal Investment Bank of Bahrain EC (FIBEC).
In 2003, Shamil Bank bought all the assets and liabilities of FIBEC and changed the name to Ithmaar Bank.
The bank’s vision is: “To be the leading international investment bank in the Middle East; and… the leading global Islamic financial services group. (1)
The bank’s values are: Experience, Innovation, Transparency, Sophistication and International Approach. Sophistication is a value that is not usually seen in companies. To these values could be added the bridge between Eastern and Western cultures.
Bahrain’s location is key to understanding the success of this fast-growing bank. As the corporate video shows, Bahrain offers access to markets, attractive costs for doing business in the Middle East, and the strength of regulation that meets international standards.
The chairman of the board of directors is Khalid Abdulla-Janahi. The side shows only limited information about it:
“Mr. Janahi holds a BA in Computer Science and Accounting from the University of Manchester, UK.” (1)
About Michael P. Lee, the CEO and member of the Board, we learn much more. Mr. Lee began his career in investment banking at Merrill Lynch in 1973. In 1992, Mr. Lee became a Senior Advisor to the Bahrain Ministry of Finance and National Economy, providing strategic advice on the development and regulation of the Center Bahrain International Finance and Investment. . He now he has lived in Bahrain for 16 years. Mr. Lee has an MA (Hons) in Philosophy, Politics and Economics from the University of Oxford. (1)
The business model contains:
– investment banking
– Islamic Finance
– Private equity (recently launched Ithmaar Kazyna CIS Regional Energy Fund)
– private banking (asset management, investment placement)
– group business development (Development of New Businesses for Ithmaar Bank and its subsidiaries and affiliates. Relationship management with institutional and VIP clients, intra-group links). And also a new fund that was launched: Latin American Real Estate Fund.
– Fusions and acquisitions
However, from the corporate brochure we learn that this business model is not an integrated entity but a conglomerate of individual companies:
Bank of Bahrain and Kuwait BSC, (BBK), Ithmaar Development Company (eg hotel development), First Leasing Bank (FLB), Solidarity Group (one of the largest Islamic insurance companies in the world), Faisal Private Bank (FPB ), Faysal Bank Limited (FBL), Shamil Bank
Which for the layman like me, one needs a basic understanding of Islamic finance, eg about the nature of interest (what about the myth that raising interest rates is not allowed):
“Riba is a loan on the condition that the borrower will repay the lender more and better than the amount borrowed.” (two)
And about the global knowledge that in Islamic countries interest is prohibited:
How is interest illegal?
The definition of interest and that it is prohibited has already been mentioned. If we explore the Qur’an, we will find at least four places where Allah has mentioned interest.
The first is in Surah Al-baqarah verse no.275
“Those who devour usury will not stand except as one is found whom Satan, with his touch, has driven mad. That is because they say, ‘trade is like usury,’ but Allah has permitted trade and has usury prohibited. (two)
How this is incorporated into Islamic (commercial) finance is (for me) still uncertain…