The Private Financial Services Department Manager at Kuwait Finance House (KFH) Talal Al-Nesf stressed that the demand for private Islamic banking services that KFH offers to its clients that have high financial coverage, has witnessed rapid growth during the past two years, despite the consequences of the financial crisis and its effect on various economic sectors and the rates of assets, as a result of the innovative investment solutions that KFH offers that segment of clients. He added in a press statement that the market witnessed new approaches after the global financial crisis, where that segment of clients have reassessed their objectives and strategies, which prompted them to be more conservative while also seeking profitable products with minimal risks. Such an approach is contrary to their approach before the crisis, where they were willing to take high risks in return for high returns in light of the available opportunities and liquidity. He noted that KFH changed its strategy to meet the new demands of this pivotal segment of clients, which allowed KFH to retain its clients and achieve satisfying growth.
Moreover, Al-Nesf revealed that during that past two years, KFH has presented a real estate portfolio with a capital of KD 50 million, where this portfolio includes a group of profitable real estates. The portfolio was a great success, which is evident by its annual returns that reached 6% that are distributed quarterly. He went on to elaborate by saying that after the first successful portfolio, KFH set up another successful real estate portfolio with a capital of KD 60 million and an annual return of 6% that is distributed quarterly. He further revealed that during the financial crisis, KFH managed to exit real estate portfolios after achieving returns that exceeded the expectations of the investors, such as KFH’s real estate portfolio in Malaysia, which succeeded in returning the capital to all investors at the end of the investment period, in addition to over 18% returns, not to mention the returns they received throughout the investment period. He added that by the end of this year, KFH is expected to exit a real estate portfolio in Turkey with a return of 12%, in addition to regaining the capital. He stated that KFH has also exited Durrat Al-Bahrain fund for real estate development, despite the market’s fluctuations, where the investors managed to achieve a return of 20% throughout five years, in addition to regaining the capital.
Concerning the deposits of clients with high financial coverage, Al-Nesf said that at the beginning of the financial crisis, there was a high demand by clients to invest in deposits because of the availability of cash, in addition to the fact that deposits are considered to be the best investment solutions with minimal risks at that time. However, as time passed, liquidity began to shift from deposits to investing in some profitable funds. It is worth noting that the returns on deposits at KFH reached 2.78%, which is rendered to be one of the best returns in the market.
Furthermore, Al-Nesf announced that KFH is ready to present more investment products and services that are designed for its distinguished clients, in order to retain that segment and increase its wealth. He added that KFH is currently considering some new products from all aspects, especially the level of risk, the expected returns, and the estimated exiting time. Those products are expected to be offered through funds that invest in the sectors of Ijarah and shipping. In addition, he stated that KFH is expected to boost the Sukuk market.
Meanwhile, Senior Investment Manager at the department Ossama Al-Rasheed mentioned that KFH has been offering its wealthy clients consultancy services and advices concerning their investments in the stock market, real estate, and other investment sectors in Kuwait and overseas. He added that KFH has exerted sterling efforts to abandon the traditional role of banks and play the role of a councilor, in addition to making investments on behalf of its clients in Kuwait and overseas. He stressed that KFH has never marketed an investment product without clarifying to its clients the level of risk, the nature of the markets, and the kind of investments, especially that investors are currently reluctant to take part in any vague investments.
Picture: Talal Al-Nesf