ICD Marketing PresentationOctober 2005
Ramadan 1426
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Presentation Outline
General Background
Working with ICD
Investment Guidelines
Portfolio Review
ICD Performance
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Mission & Proposed Vision
Vision The Islamic Corporation for the Development of the
Private Sector (ICD) strives to be a major player in the development and promotion of the private sector in OIC member countries.
Mission To complement the role played by the IDB in promoting
social and economic growth and prosperity through:
Providing Islamic financial services & products. Promoting competition and entrepreneurship in member
countries. Encouraging cross border investments. Advising governments & businesses.
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Type: multilateral financial institution.
Authorized capital: US$ 1 billion.
Capital available for subscription: US$ 500 million.
Headquarters: Jeddah, Kingdom of Saudi Arabia.
Capital structure
Member Countries
30%
IDB50%
PublicFinancial
Institutions20 %
ICD’s Capital Structure
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Shareholders of ICDCountries1. Algeria2. Azerbaijan3. Bahrain4. Bangladesh5. Benin6. Brunei Darussalam7. Burkina Faso8. Cameroon9. Djibouti10. Egypt11. Gambia12. Guinea13. Guinea Bissau14. Indonesia15. Iran16. Iraq17. Jordan18. Kazakhstan19. Kyrgyzstan20. Kuwait21. Lebanon22. Libya
ISLAMIC DEVELOPMENT BANK
Public Institutions Iran Foreign Investment Co.Bank Kesharvazi (Iran)Bank Melli (Iran)Saudi Public Investment Fund (Saudi Arabia)Banque Nationale D’Algerie
Shareholders as of 06/2005
23. Malaysia24. Maldives25. Mali26. Mauritania27. Mozambique28. Niger29. Pakistan30. Palestine31. Qatar32. Saudi Arabia33. Senegal34. Sierra Leone
35. Sudan36. Suriname37. Syria38. Tajikistan39. Tunisia40. Turkmenistan41. Uganda42. UAE43. Uzbekistan44. Yemen
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Objectives
Provide a wide range of financial products and services to Private Sector projects of high potential and contribution to growth in Islamic countries.
Mobilize additional resources for the private sector development.
Encourage the development of Islamic financing and capital markets.
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Direct Financing
Structured Finance
Advisory Services
Asset Management
Products & Services
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Presentation Outline
Portfolio Review
Working with ICD
Investment Guidelines
General Background
ICD Performance
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Accumulated approvals in USD m
37.235.2957
64.1
105 91.82
193.6
136.6
72.535.29
298.7
390.5
0
50
100
150
200
250
300
350
400
1421 1422 1423 1424 1425 1426Q2
Yearly Accumulated
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Accumulated number of projects approved since inception
510
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32
41
55
0
10
20
30
40
50
60
1421 1422 1423 1424 1425 1426
Year
Nu
mber
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Accumulated disbursement in USD m
20.4920.49
28.99
49.48
24.79
74.27 72.46
146.73
13.01
160
0
20
40
60
80
100
120
140
160
Am
ount U
SD
mm
1422 1423 1424 1425 1426
Year
Disbursements Accumulated
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ICD operations are diversified
Marketing Operations Targets
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Portfolio by sector
Industrial30%
Education4% Aviation
9%Technology
5%
Financial19%
Services1%
Oil & Gas5%
Health Services8%
Telecom14%Pharmaceuticals
5%
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Portfolio by country
Iran15.5%
Saudi Arabia12.3%
Syria8.7%
Egypt4.5%
Djibouti1.2%
Sudan8.5%
Bahrain4.8%
Pakistan7.0%
UAE5.3%
Turkey1.5%
Regional8.4%
Malaysia0.9%
Mauritania2.1%
Yemen6.5%
Azerbaijan2.1%
Lebanon2.1%
Kazakhstan2.4%
Jordan6.0%
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Portfolio by mode of financing
Leasing41.7%
Murabaha0.5%
Inst. Sale28.7%
Equity20.0%
Financing Line8.4%
Istisna'a0.7%
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Presentation Outline
Investment Guidelines
Working with ICD
General Background
Portfolio Review
ICD Performance
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Areas of Focus
Modern Manufacturing
ICT and Power
Health & Education
Financial Sector
SME’s Development
Advisory Services
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Company Eligibility: Promising private sector projects introduced by
experienced entrepreneurs or promoters. Public sector enterprises under privatization .
Eligible enterprises should have: majority voting stock in the hands of private investors,
from member countries. an appreciable contribution to the local economy or intra-
regional trade.
Investment Guidelines (1)
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Term financing: For “Greenfield” projects: 40% of project investment cost For expansion of existing projects: 50% of project investment
cost. Tenure: up to 7-8 years including Grace/Gestation period. Minimum project size: US$ 5m. (Except for projects financed
from lines).
Equity Investments: Maximum participation: 33% of investee’s capital. Clear exit strategy within 3-5 Years. Equity projects should not have more than 30% interest bearing
debt.
Investment Guidelines (2)
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Security & Guarantees:
Various types of security or guarantees are accepted by ICD:
Mortgages/pledges. Assignment of receivables. Corporate guarantees from parent companies. Personal guarantees Bank guarantees.
Investment Guidelines (3)
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Presentation Outline
Working with ICD
General Background
Investment Guidelines
Portfolio Review
ICD Performance
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Working with ICD (1)
Sponsor will have to send a feasibility study emanating from a recognized source of expertise, including: A short project description (new or expansion, project concept,
country, implementation time frame, etc); Summary of project cost and financing plan (debt/equity); Amount and purpose of the financing requested from ICD; The project’s market potential; Ownership and organizational structure; Proposed collateral or guarantees.
ICD usually conveys an initial reaction after about 2 weeks.
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Once all necessary information is received, the due diligence exercise would start and would typically entail site visits, involvement of consultants and desk work.
Once finalized, the project appraisal is submitted to the Board of Directors of ICD.
Time needed for due diligence depends on several factors. A period of between 4 – 6 months is standard.
Normally, one-third of projects approved for due diligence would reach ICD Board of Directors.
Working with ICD (2)
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Islamic Corporation for the Development of the Private Sector (ICD)
P.O. Box : 54069, Jeddah 215514, Saudi ArabiaTelephone : (966-2) 644 1644Fax : (966-2) 644 4427E-mail : [email protected] : http//www.icd-idb.org
Contacts
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Presentation Outline
Working with ICD
General Background
Investment Guidelines
Portfolio Review
ICD Performance
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Clean Audit Report.
Clean Sharia’a Report.
Gross Revenues Increase by 44% as compared to LY.
Core Investment Portfolio Revenues increased by 94% as compared to LY.
Liquid Investment Portfolio Revenues decreased by 42% as compared to LY.
Expenses increased by 18% as compared to LY.
Net Profit Increase by 167% as compared to LY.
Members’ Equity Increase by 11% as compared to LY.
ICD 1425H Annual Report Highlights
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3 Years Balance Sheet
(USD Millions) 1423 1424 1425Total Core Investment Portfolio
44.11
65.74
160.98
Total Liquid Assets Portfolio
223.51
204.28
121.46
Total Other Assets
9.79
14.96
31.87
TOTAL ASSETS
277.41
284.98
314.31
Total Members’ Equity
274.59
281.88
311.86
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3 Years Income Statement
(USD Millions) 1423 1424 1425
Core Investment Portfolio
4.68
8.74
16.97
Liquid Assets Portfolio
3.42
4.89
2.82
Services Revenue
0.76
0.47
0.58
Total Revenue
8.86
14.10
20.37
Expenses
7.92
11.61
13.71
Net Income
0.93
2.50
6.67
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Ratios - Financials
Profitability Ratios(USD Millions) 1423 1424 1425
Revenue per staff member (000’s)
285.72
381.11
433.49
Net Income to Revenue 10.55% 17.70% 32.72%
Core Revenue to Investment 10.60% 13.29% 10.54%
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Performance Comparison Between ICD & Similar Institutions
ICD
1425IIC
2003AFIC 2002
Total Revenue 20.37
21.95 6.28
Expenses 13.71 19.78 4.26
Net Income 6.67 2.17 1.85
Total Assets 314.31 426.2N/A
IIC: Inter-American Investment Corporation
AFIC: Asian Finance & Investment Corporation
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Thank you
Back-up Slides
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Leasing (Ijara)• ICD buys capital goods and gives the beneficiary usufruct rights
for a period of time against payment of fixed periodical rentals. Repayment can start after a grace period. Ownership is transferred at the end of the rental period.
Installment Sale• ICD buys capital goods and resells them to the beneficiary at a
price agreed by the two parties. The repayment is made through consecutive installments. A grace period can be accorded.
Sale Contract (Istisna’a & Parallel) • Istisna’a is a contract whereby ICD agrees to
manufacture/acquire an asset, based on a specific order received from a client, and then, once manufactured, sells the said asset (through installments), to that client for an agreed price.
Modes of Financing
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Equity• This is the purest form of Islamic financing where ICD would
share the project’s risks and benefits. Quasi – Equity
• ICD can provide for a term financing facility that could be converted (at certain conditions) into equity, at some stage of the project life.
Modes of Financing
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Net Accumulated approvals in USD m
35.29 27.855.44 53.53
112.23
35.2963.09
118.53
172.06
284.29
0
50
100
150
200
250
300
1421 1422 1423 1424 1425
Year
Yearly Approval Accumulated Approval
Net of cancelled Projects