Kuwait Finance House (KFH), the Gulf's third-largest lender, on Tuesday said it is aiming to raise $600 million in funds from Middle East investors this year to buy ships, stakes in private firms and properties in Asia.

As global economies slow, the Islamic banking industry is at risk of being hit by falling property and commodity prices, as it depends heavily on these assets to underpin transactions.

But KFH sees the drop in markets as a chance to buy good assets at cheap prices.

"Of course raising funds is not going to be easy, but this is the best time because if you have the money, then things are very cheap," the Islamic bank's Singapore chief executive Lim Boh Soon said at the Reuters Summit in Singapore, referring to current market turmoil.

Lim, who previously headed Vietcombank Fund Management, said his office's first $100 million Asia Growth Fund will be launched in the first quarter of next year, followed by a $300m property fund, and a $200 million marine fund.

He said the Asia Growth Fund expects to take stakes of about 20 per cent in 10 to 15 smaller companies in various sectors, and exit these investments when they go public.

"I can tell you that for the next few months nobody is going to make any major decisions as we're still in the centre of the storm. But they see opportunities," said Lim.

He added these opportunities are from across the region, noting particularly China and Southeast Asia, and expects to find value buys when US-based firms hit by the credit crisis start to unload their non-core investments in Asia.

Meanwhile, saw its profit rise 18 per cent to $1.74 billion in the third quarter of the year.

Net profit to shareholders was up 25 per cent to $828.66 million.

Total assets were $39.59 billion, representing an increase of $8.6 billion or 28 per cent for the same period last year.

KFH chairman and managing director Bader Abdul-Mohsin Al Mukhaizeem said that KFH enjoys a high level of liquidity, to fulfill and satisfy the needs of individuals and institutions to execute their projects.

He said the bank's Sharia-compliant methodology and its investments which are based on the selection of high quality assets have supported KFH strongly.

"KFH's business strategy has protected it from high level risk markets which contradict the Islamic investment concept that stipulates that customers' funds are considered as a trust and should be invested with utmost care," he said.

"The current financial crisis will surely impact and throw its shadows on the area markets until all related problems are solved and global markets stability is achieved.

"However, the present crisis should be tackled with great efficiency and competence. The main focus should be made on presenting accurate facts regarding the financial strength of corporations and banks participating in the market in order to avoid the panic situation prevailing currently," he added.

"The impressive corporate earnings that KFH continue to achieved only enhance the bank's position in the financial markets," added KFH-Bahrain chief executive officer and managing director Abdulhakeem Alkhayyat. - TradeArabia News Service