Riyadh, April 12, 2010 - Deutsche Bank AG announced today the formation of Deutsche Gulf Finance, a joint venture Shariah-compliant home financing company owned 40% by the Bank’s Riyadh Branch and 60% by a group of prominent Saudi-based investors, led by Fahad Abdullah Abdulaziz Al Rajhi.
Fahad Abdullah Al Rajhi said: "We are excited to partner with Deutsche Bank and benefit from its global experience in housing finance. Deutsche Gulf Finance will benchmark itself against international best practices and looks forward to contributing to the growth of home ownership in Saudi Arabia."
The Company has an initial capitalization of approximately USD110 million, and at first will provide Shariah-compliant home financing for properties located in Saudi Arabia, with plans to expand its operations into Bahrain, Qatar and Kuwait over time. Deutsche Gulf Finance has commenced financing completed units as well as those under construction on individual lots or at real estate developments.
Doug Naidus, Managing Director and Global Head of Residential Mortgage Backed Securities Lending and Trading at Deutsche Bank, said: “We are very pleased to announce the formation of Deutsche Gulf Finance, as Saudi Arabia is a key country in our emerging markets strategy. Islamic home finance continues to be an important part of Deutsche Bank’s global mortgage platform. Deutsche Bank’s global expertise coupled with the Al Rajhi family’s local prominence and experience make this an ideal and complementary business relationship.”
Deutsche Gulf Finance maintains comprehensive and customized policies and procedures covering all major aspects of housing finance operations and incorporating global inputs from Deutsche Bank, applicable Saudi law and regulations, and the highest Shariah standards. Special attention has been paid to ensure proper risk controls and oversight levels are maintained.
Jamal Al-Kishi, Deutsche Bank’s Chief Country Officer in the Kingdom, added, “The establishment of Deutsche Gulf Finance is an important milestone for Deutsche Bank's presence in the Kingdom and signifies our commitment to broaden and deepen our presence in Saudi Arabia as well as our confidence that the Saudi home finance market will witness robust growth.”
The launch of Deutsche Gulf Finance comes at a pivotal time for consumer finance in Saudi Arabia. According to Deutsche Bank Research, the total outstanding home finance provided by the private sector in Saudi Arabia aggregates to less than 1% of GDP compared with well over 50% in most developed countries, and approximately 6% in Kuwait and 7% in the UAE.
Deutsche Bank Research projects Saudi Arabia will need 1.2 million additional housing units by 2015. In addition, based on market assumptions, it estimates that when the new Saudi mortgage law is enacted it will contribute to incremental demand of approximately 55,000 additional units per year.
For further information, please call:
Deutsche Bank AG
Name : Dana Budeiri
Phone: +971 (0) 4 428 3860