BBK considers Islamic job

19 December 2003
Bank of Bahrain & Kuwait (BBK)is examining the possibility of re-entering the Islamic banking market through the establishment of a Bahrain-based subsidiary. A feasibility study is under way on setting up the unit. Among the issues being considered is whether to seek an international or regional partner.

BBK launched Al-Khaleej Islamic Bankin partnership with The International Investor (TII)in 1999, capitalised at $12.5 million (MEED 20:8:03). However, the venture has lain dormant since the withdrawal of TII, in order to concentrate on the bank's proposed merger with Albaraka Banking Group.

'The original idea was to diversify away from Islamic banking's focus on retail and real estate products into investment banking,' says BBK general manager Farid al-Mulla. 'But we may go for retail after all. That is one of the options being considered.' BBK is in discussions with the Bahrain Monetary Agency (BMA - central bank) over the proposed licence application. The new unit is likely to be capitalised at $10 million-12 million.

BBK is pursuing a wider strategy of diversifying its financial services offerings and is also considering taking a majority stake in Bahrain Kuwait Insurance Company(MEED 14:11:03).

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