EMIRATES GLOBAL ISLAMIC BANK

Live Case Study

Presented By

Muhammad Yasir IqbalKhan Khaqan Ahmed Khan

INTRODUCTION

commenced operations in February 2007.

sponsored by leading investors from the United Arab Emirates and Saudi Arabia

sponsoring shareholder of the bank, Emirates Investments Group LLC

has 41 branches in 24 cities

BALANCE SHEET ANALYSIS

Investments represent an increase of 21.14% during the year 2008. purchased fully paid shares of Gharibwal

Cement and Huffaz Seamless Pipes investments in Sukkuk certificates and bonds

Operating fixed assets increased by 69.73% under the capital work in progress the bank

advanced amounts against purchase of property. under the property and equipment head, the

bank acquired land, vehicles, office equipment etc

Issued right shares

Liabilities against assets subject to finance lease increased by 47.29% entered into various finance lease agreements with

respect to vehicles.

Posted a loss this year: has been operational for two years and grown, so the bank’s performance can be considered satisfactory.

Balance Sheet represents growth and a very strong position

DEPOSITS

Under the Fixed Deposits account, the bank basically does mudarabah. Musharakah is done only in the case of big clients, who want to invest in TDR, property etc.

Increase in Total Deposits: 139% Increase in Customers Deposits: 125.8%

number of customers during the year increased to 13,502, showing an increase of a massive 272% as compared to previous year.

Increase in Deposits of Financial Institutions: 390% shows the niche the bank has been able to carve for itself

amongst the financial institutions.

%age of Customers Deposits: 89.58% %age of Deposits of Financial Institutions 10.42%

FINANCING Increase in 2008 280%

bank invested heavily in various arenas

Bank is clearly financing Murabaha the most(47.73%)

Diminishing Musharakah(24.77%) comes second in the heads being financed by the bank

Auto Ijarah is also one of the successful product of the bank and is the third highest financing contributor of the banks financing.

Travel Finance(0.02%) is a relatively new product offered by the bank, which is not offered by all the Islamic banks.

SWOT ANALYSIS

STRENGHTS 

Elevated Ceiling for Housing Finance of Rs. 50 mn

Benefit on Asset Transfer Facility

Credit Committee

Exploiting IT to the maximum

Increasing Customer Base(increased by 272% to reach 13,502)

Cost Of Doing Business Under Control

Growing Branch Network

Rigorous Training Programme(71 training sessions, 1279 participants trained)

Good Credit Rating: “A-” for long term entity and “A2” for short term

First Bank to use Oracle-Siebel

WEAKNESSES Offerings not at par with Conventional Banks

Lack of resources

Limited Investment Opportunities

Not fully developed Shariah Board

Difficulty for customers to obtain financing

Unable to cater to all customers

OPPORTUNITIES

Customers dissatisfied with Islamic Windows of Conventioanl Banks

Devout Muslims turning towards Islamic Banking

Uncertainity created by failure of Capitalisim

The occurring Islamic revolution in country

Uncattered Market Niches

THREATS Growing Bargaining Power of Customers

Entrance of International Islamic Banks

Customers attraction towards Meezan Bank as First Islamic Bank

No substitute for various conventional banks products

No substitute for various conventional banks products

RECOMMENDATIONS

Increase it’s portfolio of products and services

Need to create awareness amongst the masses regarding Islamic banking

Strong need for aggressive marketing to be done

Target specific market niches just like Jodia Bazaar