Business | Banking
Dubai Bank eyes Dh18.35b to finance global expansion
Islamic lender sets up medium-term note programme for the purpose
- Reuters
- Published: 23:30 August 31, 2008
Dubai: Dubai Bank plans to become a major global Islamic lender over the next five years through acquisitions and has set up a $5 billion (Dh18.35 billion) financing programme to aid expansion, its chief financial officer said on Sunday.
The bank, a unit of Dubai Banking Group, has "pretty much the same aspirations" as group affiliate Noor Islamic Bank, which is aiming to be the world's largest Islamic bank within five years, Ahmad Al Shall told Reuters in an interview.
"We have a specific strategy to be by 2011 a major force to contend with in the Islamic bank arena," he said. "[Within five years] I can see Dubai Bank almost on a global basis and represented in Europe, very much in Asia and Africa and at regional level in other GCC countries."
Dubai Banking Group, a unit of Dubai Holding, has a 40 per cent stake in Bank Islam, Malaysia's oldest and largest Islamic bank, and a 40 per cent stake in ACR Re-Takaful Holdings Ltd, the world's largest reinsurance company.
The group is looking to continue its expansion into Asia and Africa and would use the Dubai Bank brand to enter the banking sector in those markets, Al Shall said.
"It will be a combination of organic and acquisition [based] growth ... There are negotiations for joint ventures with certain countries whereby the target is to make sure we have control of an existing business," he added, declining to be more specific.
Unlike conventional banking, where lenders such as Citigroup and HSBC Holdings dominate, there are no global Islamic banks.
HSBC, for instance, offers sharia-compliant services through its Amanah unit, while Gulf lenders such as Kuwait Finance House and Al Rajhi Bank have expanded into countries such as Malaysia, where Muslims form a majority.
Dubai Bank, with assets of about Dh16 billion, has also set up a $5 billion medium-term note programme to help finance the proposed expansion, although the bank is waiting for the "opportune" moment before tapping the debt markets.
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