Investcorp Bank B.S.C. ('Investcorp Bank') is domiciled in Bahrain as a wholesale bank, under the regulatory oversight of the Central Bank of Bahrain ('CBB'), with shares listed and traded on the Bahrain Bourse.
Within the Investcorp Group of companies, Investcorp Bank is the principal parent entity and owns a 100% economic interest in Investcorp Holdings Limited ('IHL'), its Cayman Islands-based subsidiary. In turn, IHL has two subsidiaries, the principal subsidiary being Investcorp S.A. ('ISA'), domiciled in the Cayman Islands as a holding company.
The significant subsidiaries of Investcorp Bank are discussed in Note 1 (iv) to the consolidated financial statements of Investcorp Bank. Investcorp Bank and its consolidated subsidiaries are referred to interchangeably as 'Investcorp' and the 'Investcorp Group'.
Investcorp Bank's ownership and subsidiary structure is designed to ensure that:
- The interests of Investcorp Bank's strategic shareholder group, comprised of Investcorp Bank directors, prominent Gulf individuals and institutional shareholders, together with public shareholders, are closely aligned with those of management; and
- Investcorp Bank effectively operates as a management controlled entity
Substantially all of the Investcorp Group's assets and operations are owned and controlled by ISA. As a result, substantially all of the Investcorp Group's commercial risks are held outside of the Middle East.
The shareholding structure of Investcorp Bank is outlined in Note 1 (iii) to the consolidated financial statements of Investcorp Bank. At June 30, 2015, Investcorp Bank is owned by public shareholders, management and strategic shareholders. Public shareholders own approximately 32.0% of the Ordinary Shares of Investcorp Bank which are tradable on the Bahrain Bourse and are held predominantly by Gulf-based nationals and institutions. International shareholders hold 0.9% of the Ordinary Shares, represented by unlisted Global Depositary Receipts. SIPCO Limited ('SIPCO') directly and indirectly owns 28.5% of Investcorp Bank's ordinary shares. Investcorp Funding Limited ('IFL'), a subsidiary of Investcorp Bank, holds 0.1% of Investcorp Bank's Ordinary Shares.
The 28.6% of Investcorp Bank's ordinary shares owned directly and indirectly by SIPCO and IFL represents:
- Management and other current and former Investcorp Group employees' (87 current and former employees in the aggregate) ownership of beneficial interests in 15.2% of Investcorp Bank's Ordinary Shares through Investcorp Employee Share Ownership Plans (each such plan an 'ISOP'), which includes 4.2% acquired but unvested shares under an ISOP;
- Treasury shares, amounting to 1.8% in shares that are held for potential grant pursuant to an ISOP; and
- Treasury shares, amounting to 11.6% of Investcorp Bank's Ordinary Shares, available for future sale to strategic shareholders or for Investcorp Group employees to acquire beneficial interests in Investcorp Bank's Ordinary Shares through an ISOP.
The ownership of beneficial interests in Investcorp Bank by management and other employees is implemented through the ISOPs. The ISOPs are deferred remuneration programs pursuant to which management and other employees buy their allocated beneficial interests in Investcorp Bank utilizing variable (incentive) remuneration. These plans are intended to promote stakeholder alignment, encouraging management to focus on long term value creation and prudent control of balance sheet risks. Investcorp Bank has approval from the CBB to hold up to 40% of Investcorp Bank's Ordinary Shares for the ISOPs.
Ownership Holdings Limited (‘OHL'), a Cayman Islands company, has control of 65.6% of Investcorp Bank's Ordinary Shares directly and through C.P. Holdings Limited (‘CPHL'), a Cayman Islands company. CPHL is majority owned by OHL which, in turn, is majority owned by SIPCO. Strategic shareholders own the balance of CPHL and OHL. SIPCO also holds 1.4% of Investcorp Bank's Ordinary Shares directly.
As a result of Investcorp Bank's ownership structure, the directors of SIPCO, comprised of certain Investcorp Bank Directors and Investcorp Bank senior executive officers have the ability to control the voting of 69.1%¹ of the Ordinary Shares of Investcorp Bank.
Investcorp's senior management (Investcorp's Managing Directors) hold beneficial interests in Investcorp Bank's Ordinary Shares through the ISOPs. No member of senior management of Investcorp directly holds Investcorp Ordinary Shares. Certain members of senior management hold Investcorp Bank Preference Shares.
Information regarding the ownership and trading of Investcorp Bank's Ordinary Shares and Preference Shares by Investcorp Bank's Directors and the ownership of Investcorp Bank Preference Shares by certain members of senior management is provided in the Investcorp Bank Fiscal Year 2016 Corporate Governance Report (‘Fiscal Year 2016 Corporate Governance Report') which is a supplement to the Fiscal Year 2016 Annual Report.
As reported above, an aggregate of 67.1%¹ of Investcorp Bank's Ordinary Shares are held by SIPCO, OHL, CPHL and IFL, each of which is a Cayman Islands company.
¹ Numbers may not add up due to rounding