MANAMA, 27 March 2008 — A new Islamic bank with a total market cap of $321 billion will be up and running by the fourth quarter of the year, a leading Saudi businessman and chairman of the world’s largest Islamic banking group AlBaraka Banking Group said.
Shaikh Saleh Kamel, chairman of ABG, on the sidelines of the annual general assembly of ABG held at Crowne Plaza here yesterday said that initially the bank’s capital would be $11 billon against which the bank would raise $110 billion from the funds and over $200 billion from the sukuks or Islamic bonds.
Kamel said the founding shareholders would include ABG, the Jeddah-based Islamic Development Bank, the Kuwait Real Estate Bank, the Saudi Investment Bank, the Bahrain Islamic Bank and other prominent Islamic institutions and individuals.
“We have a huge responsibility to develop this land of Allah beyond the concept of real estate, and the new entity will be exactly tapping those potentials among the OIC member states as well as other markets,” he said.
Referring to sub-prime mortgage crisis and whether it had any impact on ABG balance sheet, Kamel said that any institution implements the true Shariah principles would not suffer.
“The businesses based on ‘debt’ concept are prone to these types of risks, such as sub-prime, and ABG has no impact since it doesn’t follow the debt model in business,” he said.
At the AGM presided over by Kamel, the shareholders approved the financial statement for 2007 in addition to election of an eleven-member new board and increase in the capital. The meeting gave a nod to distribute a cash dividend of $59 million for the year and an allotment of bonus shares at the rate of one share for every 14 paid-up shares (with a total value of $47 million) to the shareholders.
Kamel said that the group continued its strong performance in 2007 that was characterized by mobilizing more financial, technical and human resources in accordance with the unified and coordinated plans and strategies of the group and the subsidiary units.
“We were thus able to achieve excellent growth in earnings and assets. All of our subsidiary banks, with no exception, contributed to achieving this growth after we enhanced their capitals, restructured certain banking units and activities, expanded our geographical presence and introduced many modern banking technologies.”
He said that the ABG has enormous growth and expansion potentials that it would implement gradually and which would have very positive effect on enhancing shareholder value.
Adnan Ahmed Yousif, president and chief executive of Albaraka Banking Group, said that the group was implementing a new and highly ambitious five-year strategic plan based on a number of objectives, programs and initiatives.
