Abu Dhabi Islamic Bank (Adib) has linked its latest structure note offering to one of the fastest-growing industries in the world — smartphone manufacturing.

The United Arab Emirates bank said that the rapid increase in demand for wireless data is driving demand for smartphones and tablets, with global smartphone sales surpassing a billion units for the first time in 2013. Sales of the devices are forecast to rise by around 20% per cent this year, according to consultants International Data Corporation.

The capital-protected note has an 18-month investment term and is linked to the performance of a basket of equity shares from leading smartphone manufacturers across the world, including Apple Inc, Lenovo Group Ltd, LG Electronics and Samsung Electronics.

The bank also said that it is enhancing its wealth management offering with products that respond to its clients’ investment needs, as well as offering valuable advice on asset allocation.

Adib has been increasingly active in the structured notes space, with a number of structures sold among retail investors including a capital-protected gold note that matured paying out 115% of initial capital and an oil-linked structured note that returned 118% last year.

The bank launched a capital-protected note in January that allows customers to invest in the world’s biggest car manufacturers.

The payoff structure of the product could not be established by press time.

Expat expansion
Adib’s head of retail banking Philip King said in a recent interview to GulfBase that it is seeking to gain a significant market share of Islamic banking and financial services among expatriates and non-Muslim customers while remaining loyal to the core UAE national customer base.
King said there has been a significant increase in the number of expatriate customers, both Muslims and non-Muslims, in the last few years.
“Our non-Muslim customer base is rapidly expanding. It used to be 80% UAE nationals and 20% expatriates. The new trend we see is that the flow of new business is about 60% nationals and 40% expatriates with a significant share of that business coming from non-Muslim expatriates,” he said.
King said that the bank is planning to expand its distribution channels in Dubai and the Northern Emirates.

Adib Group reported a 20.7% increase in net profit to Dh1.45bn (€196m) as total assets grew 19.8%. King said that the financial performance was significantly supported by retail customer financing that grew more than 20% while deposits grew 23.2% last year.
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