Bank planning bonds for $1bn acquisition

GolfDailynews.com

MANAMA: Bahrain Islamic Bank is planning a $1 billion acquisition next year and expects to raise the capital through Islamic bonds, a top official has said.

The announcement was made on the sidelines of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) World Bank Conference on Islamic Banking and Finance at the Diplomat Radisson SAS Hotel Residence and Spa yesterday.

"I'm looking for a $1bn acquisition and it will be financed mainly through Islamic bonds," Bahrain Islamic Bank chief executive Mohammed Ebrahim Mohammed said. "A big reason we're trying to grow is to not be acquired ourselves. We haven't had approaches to our knowledge, but small banks are always a target."

Meanwhile, the Council of Islamic Banks and Financial Institutions general secretary Ezzedine Khoja said that the assets of Islamic banks and banking institutions reached $1bn last year, recording a 40 per cent growth rate against the 2005 figures.

The conference was opened by Finance Minister Shaikh Ahmed bin Mohammed Al Khalifa who gave an introductory speech.

This was followed by speeches from Central Bank of Bahrain Governor Rasheed Al Maraj and AAOIFI board of trustees chairman Shaikh Ebrahim bin Khalifa Al Khalifa.

Sponsors of the event include Kuwait Finance House, Gulf Finance House, Al Salam Bank, Arcapita and others.

"It has been an annual tradition to hold this conference as a point to change the views of scholars and analysts," Shaikh Ahmed said.

"The discussion of emerging new tools and Sharia compliant rules increases awareness and enhances standards for transparency and harmonisation between Islamic countries.

"The conference also gives us the benefit of the ability to discuss innovation with new products and consolidating other existing products," Shaikh Ahmed said.

"This conference shows that we are taking the necessary measures to insure Bahrain complies with the best banking practises and standards globally," Mr Al Maraj said.

"I would like to thank AAOIFI in cooperation with the World Bank for enriching our expertise in developing global and national Islamic finance in a sector that is seeing a growth of 10 to 15pc annually."

The global market for sukuks was worth $8bn in 2003, the global market for sukuks is now $70bn and is expected to double in the next three years, a finance ministry official told the GDN.

Also at the conference, Bahrain-based Albaraka Banking Group said its $300 million Islamic bond going to market early next year after the global credit crunch delayed the sale.

Albaraka announced the sale in March this year but due to the US home loan defaults has reorganised to delivery in the first quarter of next year.

The bank also announced the opening of a branch in Indonesia in an attempt to stay ahead of rivals when offering Islamic banking globally.