Noor puts overseas expansion on hold

Dubai: Dubai's Noor Islamic Bank has halted its overseas expansion plans, citing difficult global economic conditions and a tight credit market.

The bank, launched with more than $1 billion in capital and ambitions to become a major global Islamic banking player, would however continue to expand in the home market, chief executive officer Hussain Al Qamzi said yesterday at the launch of the group's two Islamic insurance business units.

"There is a crisis. This has affected the whole world. We are going to be affected because the whole baking sector is affected," Al Qamzi told reporters, and added: "We have put on hold some of our overseas expansion plans."

Asked for how long these plans would remain on hold, he said: "We will review [the situation] by the end of 2009."

Al Qamzi said the bank has curtailed its investment activities because of the credit market crisis.

"We are prudent because there is a shortage of liquidity in the market," he said, adding that the first half of this year is going to remain difficult but the liquidity situation would improve by September.

Noor had devised a five-year plan for expanding overseas, including starting operations in the Gulf.

It aims to create a presence in populous Islamic countries such as Pakistan, Turkey, Indonesia and Egypt. North Africa is seen as a key region because of potential consumer demand for Islamic banking services, which have been largely neglected by banks in Algeria, Libya, Morocco and Tunisia.

The bank, which began with a network of 10 branches in January last year, continues to push ahead with its domestic expansion plans.

It will have a total of 17 branches by April and plans to have three more by the end of 2009, Al Qamzi said.