DUBAI, 10 January 2008 — Dubai plans to create the world’s largest Islamic bank within five years, spending as much as $1 billion on individual acquisitions in countries as far apart as Indonesia, Egypt and Britain, Noor Islamic Bank said.
Noor, which is 25 percent owned by the government of Dubai and 25 percent by the emirate’s ruler, plans to spend between $500 million and $1 billion each time on a “few” acquisitions in Europe, Asia and North Africa, Chief Executive Officer Hussain Al-Qemzi told Reuters in an interview on Tuesday.
“We aim to be the largest Islamic bank within five years,” Qemzi said in his office in Dubai, two days after the lender officially started operations. “Acquisitions will be the main way because there is no time to grow organically,” he said.
The Dubai government, ruler Sheikh Mohammed bin Rashid Al-Maktoum and 15 other individuals have put 3.16 billion dirhams ($860.6 million) into the project and may put in more when the lender starts considering acquisitions by the end of March, with a view to making its first move outside its United Arab Emirates base before year-end, Qemzi said.
Islamic lenders controlled assets worth about $750 billion at the end of 2006, a figure which may rise above $1 trillion by 2010 as the industry expands, according to US management consultants McKinsey & Co.
Saudi Arabia’s Al-Rajhi Bank, the world’s largest Islamic lender, had assets worth $33 billion at the end of September.
In its acquisition strategy, “it would be better to do a few of a good size rather than many small ones,” Qemzi said, with Egypt, and North African nations such as Morocco and Algeria at the top of the wish-list.
Noor aims to be the world’s biggest Islamic bank by assets and countries of operation, with a focus on the largest Muslim nations such as Turkey, Egypt, Pakistan and Indonesia, Qemzi said.
“We also want to be in mature markets, such as in Europe, were Muslim populations are growing,” Qemzi said, pointing to Britain, France and Germany.
Unlike in conventional banking, where lenders such as Citigroup Inc and HSBC Holdings Plc dominate, there are no global Islamic banks.
Noor, which plans to double its branches in the UAE to at least 20 by the end of next year, aims to mirror HSBC’s global brand in the Islamic field, Qemzi said.
