Qatar First Bank LLC (QFB), in partnership with another organization, has invested in the international aircraft leasing industry.
QFB, a top performing Shari’ah-compliant bank, has teamed up with Novus Aviation Capital, an internationally recognized and quickly growing aircraft leasing platform, to obtain and lease two 2011 vintage Boeing 737-900ER single-aisle aircraft. The planes will be leased to Indonesia’s Lion Air.
“We are delighted to have provided our clients, who have shown a strong interest, with this attractive investment,” Ziad Makkawi, CEO of QFB, said. “The transaction is in line with our strategy to diversify QFB’s revenue sources. We see opportunities in the aviation industry as it has historically generated relatively predictable returns over the medium to long term, something the market is in search off. The outlook for the leased aircraft type, the B737-900ER, is very favorable which has positive implications for the preservation of its market value, and more importantly will provide strategic investors with recurring and sustained income streams."
The deal will cover the cost of the venture in two B737-900ERs, the primary asset in Boeing’s Next Generation series, the production family for the B737.
“Our focus since the listing of the bank’s shares on the QSE was on generating steady income and offering shari’ah compliant structured products,” said Makkawi. “This attractive investment fulfils these objectives as the aviation industry has maintained a stable and sustainable growth path in comparison with alternative investment benchmarks.”
Dubai-based Novus Aviation Capital will manage the lease agreement. The company leads the way in aircraft sourcing, trading, leasing and other associated services, and holds a current portfolio of around $3 billion. Novus Aviation Capital has had successful deals with more than 40 major airlines, closing over 400 lease and investment agreement with a total value of $8 billion.
“We are very pleased to be partnering with Qatar First Bank on another landmark aircraft transaction and look forward to further developing our relationship on other attractive yielding aircraft assets,” Safwan Kuzbari, president and CEO of Novus Aviation Capital, said.
QFB handled the Islamic financing part of the transaction while Novus Aviation Capital exclusively arranged the financial and lease elements of the agreement.
“Deploying capital, alongside our clients, and making investments in selected industries, such as the aviation sector, is an attractive direction in today’s challenging market and economic conditions,” Makkawi said. “We are in the process of structuring several Shari’ah-compliant products to enable our shareholders and clients, private and corporate, to participate in these investments.”
With a strategic goal of helping shareholders and clients grown and protect their wealth, QFB developed a product line that is Shari’ah-compliant. The products include financing, private banking, investment solutions, family office services and many more.
In addition to the new product line launch, QFB inked an agreement with real estate experts that would allow customers to discover competitive opportunities keeping their budget and requirements in mind. The bank also announced the completion of 7-12 Leinster Square, a unique, residential real estate project in Leinster Square – London W2.