National Bonds registers 75 per cent increase in regular savers in 2016
National Bonds Corporation PJSC (National Bonds) has announced that its encouragement of savings discipline has resulted in a staggering 75 per cent increase in its regular savers in the UAE in 2016 compared to the previous year, clearly reflecting the growing confidence in its popular Shari'ah-compliant savings and investment scheme.
Attributed to its low-risk responsible investment, balanced assets portfolio and income diversification mechanism, National Bonds’ customers have earned annual returns of up to four per cent in 2016.
These numbers demonstrate the success of the company’s capital preservation strategy, its focus on responsible investments in real and sustainable economic sectors, and investment portfolio diversification while retaining focus on the growth of the local economy through the contribution of its Mudharaba portfolio.
National Bonds’ investments in the UAE constitute 92 per cent of the overall investment portfolio, with five per cent placed within the other GCC countries and the remaining three per cent spread elsewhere. Given the high liquidity offered by the company’s scheme, money market and fixed income instruments constitute 63 per cent of its investment portfolio, while the remaining 37 per cent comprises revenue generating real estate (14 per cent), real estate development (nine per cent), and listed and private equities (15 per cent).
Reinforcing its focus on responsible investments, the company supported a first-of-its-kind Shari'ah-compliant and environment-friendly project that aimed to make staff accommodation more energy efficient and sustainable by retrofitting old buildings.
Furthermore, National Bonds continues to offer bondholders real estate investment opportunities, such as its Motor City Green Community project comprising the Casa Familia, Casa Flores villas, and Eden apartments. Bondholders are given a best-in-class payment plan that allows them to pledge 10 per cent advance payment from their existing savings and contribute the remaining 90 per cent over a seven-year payment plan post hand over.
As part of its strategy to diversify its investments globally, the company has invested in sukuks belonging to the Governments of Malaysia and Oman. In addition, the company invested in a private Sukuk from Singapore and a private Shari'ah-compliant fund in the United States of America.
Impressive Annual Profits
National Bonds also distributed its annual returns, including annual profits and donated rewards, among the customers. Holders of Saving Bonds worth more than AED 50,000 received on average 1.76 per cent return, while those with bonds valued at AED 150,000 or more achieved on average 2.43 per cent. Meanwhile, customers who had a balance of over AED 350,000 in their accounts enjoyed on average 3.37 per cent. In a bid to reward loyal customers, bond holders that had invested with National Bonds since inception obtained 54.8 per cent in total returns. Its three-year Term Sukuk provided three per cent annual returns, compared to 2.25 per cent offered on the two-year Term Sukuk and 1.75 per cent on the one-year Term Sukuk. In addition, the company’s Step-Up Bonds offered four per cent annual returns.
National Bonds’ myPlan savings programme recorded a strong uptake among UAE nationals in 2016. The number of Emirati minors enrolled in the programme surged by an astounding 99 per cent in comparison with 2015, while the number of Emirati women grew by 80 per cent and the number of their male compatriots rose by 78 per cent. The numbers of expat regular savers also witnessed a significant increase compared to 2015 – minors by 95 per cent, men by 88 per cent and women by 74 per cent.
“At National Bonds, we measure our success by the strategic results we achieve throughout the year in terms of attracting more savers and investors through innovative plans that provide long-term returns with low risks. Our investments, the majority of which are within the UAE, ensure a sound and sustainable contribution to the local economy, society and the environment,” said Mohammed Qasim Al Ali, Chief Executive Officer of National Bonds.
Al Ali noted that 2016 brought a multitude of challenges due to declining oil prices and market volatility that raised investor concerns and impacted their financial decisions. However, thanks to the low-risk, capital preservation investment strategy adopted by the company, the year also saw solid growth and impressive financial results that reinforce the company’s steady progress over the past few years.
He added: “In line with the UAE National Agenda as well as our leadership’s vision of making the UAE the happiest nation in the world, we seek to assist the UAE community in achieving financial happiness through our continuous focus on enhancing the savings culture. In addition, we have upgraded our IT platforms to ensure a more user-friendly and seamless customer experience.”
In this context, Al Ali mentioned that National Bonds developed a series of new products tailored to various segments of the bondholders. Sanadi, a Takaful plan offered in partnership with a local takaful operator, gained more than 3,500 subscribers since its launch. In addition, National Bonds introduced the Prestige wealth management programme for the benefit of high net worth clients. With the aim of building a savings culture across public and private sector organisations, National Bonds continued to focus on the Employee Savings programme, which recorded an astounding growth rate of 71 per cent in 2016.
Quoting the inspiring words of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, Al Ali added: “A happy employee is more productive, more energetic and more creative, hence the importance of creating a happy environment within every institution. Among our greatest assets are the wonderful men and women we proudly employ at National Bonds. Therefore, we have devised tailored programmes to attract and retain the exceptional talent that is key to our sustained success.”
In addition to strong financial returns on savings and investments, National Bonds won multiple accolades for its products and services last year. The company attained three industry distinctions from CPI Financial and awards from Banker Middle East, Naseba and Islamic Retail Banking.