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IFC Signs Its First Islamic Home Financing Facility with Saudi British Bank


In Washington:
Georg Schmidt

Phone: +1 (202) 458-2934

Fax:      +1 (202) 974-4384

Email:
Gschmidt@ifc.org


Riyadh, June 21, 2005 — The International Finance Corporation, the private sector arm of the World Bank Group, signed today its first-ever Murabaha facility with Saudi British Bank. IFC’s investment of SAR187.5 million will support the growth of the bank’s Islamic home financing portfolio. The project is a key element of IFC’s effort to encourage the development of a viable housing finance market in Saudi Arabia.  

With this facility linked to housing finance, IFC aims to catalyze Saudi Arabia’s primary mortgage market. The project will also explore opportunities to support technical and advisory services for local authorities to help create a fully developed housing finance sector. IFC’s goal is to replicate this innovative approach across the region in order to increase access to housing finance for low- and middle-income individuals.


Sami Haddad, IFC's Director for the Middle East and North Africa, commented, "We are pleased to work with Saudi British Bank and support one of the most successful and pioneering commercial banks in the area of home finance. Our facility provides an important stimulus for the housing finance market in Saudi Arabia and for the whole region.  Without increasing the availability of long-term funding for housing finance, the lower-income segments of the market will continue to be underserved and denied the chance at home ownership.”


Commenting on the event, Geoff Calvert, Saudi British Bank’s Managing Director, said, “This transaction supports our strategy of providing more funding to Saudi citizens to purchase or build their home, and it will have a very positive impact on the national home financing market. IFC’s prestigious financing fits well with our long-term mortgage program. The strength of our bank, the diversity of its products and services, and its wide base and strong management encouraged IFC to choose us for this innovative transaction. The investment underscores IFC’s confidence in the strength, the growth, and the long-term opportunities of the Saudi financial market.”


Saudi British Bank is a joint venture bank, with 60 percent of its shares owned by Saudi nationals and 40 percent owned by HSBC. HSBC is one of the world's largest banking and financial organizations, with over 9,500 offices in 79 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East, and Africa. With total assets of around $15.4 billion as of March 2005 and a market share of over 9 percent, Saudi British Bank is currently the market leader in housing finance in Saudi Arabia.


The mission of IFC (
www.ifc.org) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives.  IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956, through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of end of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.