McKinsey and TII sign strategic advisory agreement

Dedicated project task force will spearhead post-merger integration strategy, focused on maximising business potential and shareholder value.

The International Investor (TII) has announced the signing of a strategic advisory agreement with McKinsey & Company Inc., (McKinsey) the world's leading strategy and professional services consultancy. A joint McKinsey-TII project task force will focus on maximizing the business potential and shareholder value of the new Islamic financial services group to be formed as a result of the retail and investment banking assets-merger deal between Dallah Albaraka Group (DBG) and TII.

Mr Kito de Boer, managing director of McKinsey Middle East, said: 
"First, let me congratulate Sheikh Saleh Kamel, chairman of DBG, and Mr Adnan Al Bahar, chairman and managing director of TII, for realising their vision to create the first pan-regional Islamic financial services group in the Middle East. McKinsey is honoured to have the privilege of working with this ground-breaking institution to shape the future of Islamic finance.”

Mr Adnan Al Bahar, chairman and managing director of TII, said:
"We are equally honoured to have the privilege of working with McKinsey - world leaders in strategic consultancy - and look forward to a long and rewarding partnership. This agreement underlines the commitment of Sheikh Saleh and myself to turn our dream into reality. We view it as the critical first step in our challenging journey to create the leading global Islamic financial services group.”

A dedicated task force is now being formed to spearhead the integration and value creation project. This includes a pan-cultural and multi-disciplinary team of McKinsey consultants drawn from around the world, and a cross-functional team of specialists from TII business divisions and Albaraka banking subsidiaries. The task force will focus initially on defining a value creation plan. This will embrace areas such as revenue performance, cost reduction, market competitiveness, complementary skills and capabilities, product diversity, and geographic focus. The project will also cover corporate strategy, corporate governance, financial control, organisational structure, IT and operations, and corporate communications.

Commenting on this assignment, Mr Kito de Boer said:
"Islamic banking is one of the fastest growing sectors in financial services in the region. While demand for Islamic banking services is strong, the supply side is still weak and fragmented. Due to the fragmentation and small scale of most operators, service levels and product offerings fall short of consumer expectations. So there is a clear opportunity for institutions that can provide effective, reliable and high quality services in the sector. We are therefore excited at the opportunity to be part of this pioneering initiative to shape the future of Islamic banking.”

“McKinsey is the ideal advisory partner for this venture," confirmed Adnan Al Bahar. "They have unrivalled experience in mergers and acquisitions, financial services, and emerging markets. In particular, they specialise in helping clients shape their performance within the context of today's new economy. A hallmark of the new economy is the premium value it places on intangible assets such as talented people, knowledge, relationships, brands and reputation. Maximising the value of these assets will be critical for the sustainable growth and continued success of the new Group.”

TII confirmed that pre-project planning has already started, in readiness for the closing of the deal between Dallah Albaraka Group and TII, which is in the final stages of negotiation.