Dubai Islamic Bank Wealth Management yesterday announced what it claims is a first of its kind in the region. The shariah-compliant three-year Commodity Linked Individually Capped Performance (Clip) Note is capital-protected and linked to a basket comprising gold, crude oil, copper, aluminum and zinc.

Clip is supported by DIB's Shariah Supervisory Board and the Shariah Supervisory Board of London-based shariah consultant Dar Al Istithmar. The notes are co-branded with issuer Deutsche Bank and have a minimum investment of $10,000.

Clip Notes pay a fixed 10% in the first year and a maximum of 8% per annum in the second and third years, depending on the performance of the basket of commodities.

“It is a beautiful product,” said head of international wealth management Saadat Muzaffar. “A lot of people want capital protection and they want shariah compliance, but they also want to participate somewhat in the upside. We are giving 300 basis points over deposit rates.”

“We feel DIB customers can derive benefits from the emergence of commodities as a preferred asset class, and consider commodities in the same way they view equities," added head of wealth management Saeed Al Qatami.

The bank said it had partnered with Deutsche Bank because of its strong track record in developing sharia-compliant products across all asset classes. "Investing in commodities is a complex science: right from the selection of commodities to allocation of funds for each commodity requires special expertise and a robust platform to support these activities," said DIB’s head of investments Naveed Ahmad. "Over the past year, we have worked hard to develop a solid infrastructure for the retail investment platform," he said.

In May, DIB launched the Al Islami Capital Protected Note, which it said was part of a strategy designed to achieve higher growth and provide high returns to investors via a series of investment funds. More structured products are expected, as DIB ‘aggressively’ expands its network to 53 branches throughout the UAE by the end of 2007 and promises continued diversification of products and services.

In July the bank announced a 56% year-on-year increase in its half yearly net profit to AED707m ($192.5m).