The management of Cham Bank, the first private Islamic bank in Syria, revealed its intention to establish a limited liability company to enter the real estate market.

In a disclosure published by the Damascus Securities Exchange (the stock market) on May 21, it mentioned that the fully bank-owned company’s capital amounts to one billion Syrian pounds.

The bank’s management confirmed the approval of the Monetary and Credit Council to establish the company, stating that the matter is pending presentation to the general assembly of the bank’s shareholders.

The company started with a small capital of about 66,000 US dollars according to the unofficial dollar market rate.

Reconstruction calculations 

Economic researcher Younes al-Karim is convinced that the establishment of the real estate company by Cham Bank indicates an upcoming movement in the Syrian real estate market, which is experiencing a state of stagnation.

The establishment of the company serves the bank in terms of not distributing profits to shareholders (capital freezing), under the pretext of company financing, as the bank’s management aims to expand the bank’s assets in anticipation of the bank’s evaluation if the reconstruction process of Syria begins, especially since the bank’s step came after increasing its capital, as the researcher told Enab Baladi.

On the other hand, expert and economist Firas Shaabo describes the bank’s move as a “circumvention” of Syrian law, which prohibits banks and financial institutions from owning real estate, except those allocated for banking work.

He explained to Enab Baladi, that establishing the company allows the bank to invest in real estate, that is, property ownership and providing loans to holding companies in the market, as a form of internal financing for real estate development projects in Damascus and its countryside.

Accordingly, Shaabo expects that some private banks will follow the lead of Cham Bank, especially since urban projects require significant financing needed by real estate development companies to commence operations.

Cham Bank

Cham Bank (Islamic private bank) was established in 2006, with a capital of five billion Syrian pounds, and the company’s capital was increased thereafter.

The ownership of Cham Bank is shared among Syrian shareholders, companies, and Arab banks, such as the Commercial Bank of Kuwait (Kuwait) which owns 32% of the shares, and also the Islamic Development Bank (International) owns a 9% share, and Muhaidib Holding company (Saudi Arabia) with a 3% share.

Among the Syrian founders and shareholders in Cham Bank is Ahmad Nabil al-Kuzbari, who holds a 5% share of the bank’s stocks and serves as the vice-chairman of the board of directors.

Al-Kuzbari as a commercial front

Ahmad Nabil al-Kuzbari, the chairman of the Constitutional Committee at the People’s Assembly and the co-chair of the regime’s delegation in the Constitutional Committee talks held in Geneva with the participation of the Syrian opposition and the United Nations, is described as a “commercial front.”

According to the Pro Justice organization, which specializes in prosecuting war criminals in Syria, al-Kuzbari benefited from developing his financial relationships by relying on his late brother, businessman Shadi al-Kuzbari, the husband of the daughter of the late Brigadier General Bahjat Suleiman, the former Syrian ambassador to Jordan.

The organization mentioned that al-Kuzbari played the role of a commercial front for Suleiman’s money and his children, which had been amassed from corruption operations since 1984, thereby increasing the financial empire of Bahjat Suleiman’s arms, with al-Kuzbari being one of the contributors therein illegally.

Under the bank’s cover

Economic researcher Radwan al-Dibs confirmed to Enab Baladi that establishing the real estate company facilitates the implementation of real estate investments for some influential individuals in Cham Bank and other partners, considering that “the company provides legal coverage for suspicious money to enter the real estate activity.”

He explains that the bank’s name removes the question marks over the real owners of the real estate projects that the company will later implement, especially since it is certain that the company will allow buying shares in it.

Al-Dibs links the step of Cham Bank to the meeting held by the Syrian regime’s president, Bashar al-Assad, with economic academics, in late March, during which al-Assad spoke about the need to launch private initiatives to find economic solutions.

In 2017, the US Treasury Department imposed sanctions on Cham Bank for “providing support to the Syrian regime government.”