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.
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.
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.