DUBAI
Dubai Islamic Bank (DIB), the largest Islamic bank in the UAE, has launched Panin Dubai Syariah Bank in Indonesia, following its acquisition of 40 per cent shares in PT Bank Panin Syariah Tbk.
DIB had acquired around 25 per cent shares of Bank Panin Syariah, in May 2014. In the second phase of acquisition in 2015, DIB increased its shareholding in the Indonesian entity to 40 per cent.
The bank has been rebranded to Panin Dubai Syariah Bank (PDSB), marking DIB’s first entry into the Asia-Pacific region.
The rebranded bank offers Islamic banking services in Indonesia. With a total population of 200 million people, 95 per cent of which are Muslim. The Sharia compliant banking market in Indonesia is expected to grow from 3 per cent to 11 per cent by 2020 with Islamic finance becoming a defining pillar of Indonesia’s future growth.
“This acquisition is an important milestone for DIB. As the world’s first fully-fledged Islamic bank, we not only established a new banking model four decades ago, but also took on the responsibility to grow and develop the global Islamic finance market. One way we are doing this is through strategic partnerships and Bank Panin is a perfect partner for us in the Asia-Pacific region,” said Dr Adnan Chilwan, Group CEO of DIB.
DIB has experience of doing business in Indonesia on key Sharia compliant transactions including the 2015 Garuda Airlines’ structuring for its $500 million (Dh1.84 billion) five-year sukuk offering. DIB has substantial activities in Indonesia with more than $500 million investments on its proprietary book held to maturity.
“As an established player with years of experience and local market knowledge, Bank Panin will enable us to progress our vision for Islamic finance in Indonesia and across the region. Looking ahead, we will execute our strategy in Panin Dubai Syariah Bank just as we have consistently done over the past forty years in the UAE and in our other key international markets, and are confident that this partnership will ultimately get us one step closer to making Sharia-compliant banking the norm, rather than an alternative to conventional banking, around the world,” Dr Chilwan said.
Despite the challenging economic environment in 2016, DIB reported a net profit of Dh4.05 billion, a significant increase of 6 per cent per cent compared to Dh3.83 billion in 2015. Following a revised strategy in 2016, the bank’s Pakistan operations saw its profits double. “The focus now is to get Indonesia and Kenya launched to play their part in contributing to the progression of Islamic finance, a core ambition for the bank,” the bank said in a statement.
