The board of directors of the Genevabased Dar al-Maal al-Islami (DM1) Group is to decide in May whether to go ahead with restructuring proposals put forward by the management team for the group’s international operations. DM1 Group chief executive Omar Mi told MEED that the proposals include plans to streamline operations that will meet the growing competition in the Islamic banking sector.
‘Islamic financial institutions are going through restructuring all over the world because conventional institutions have come into the Islamic financial system more strongly,’ Mi said. ‘We are planning to give much more room for manoeuvre (to our sub sidiaries) in the field.’ DM1 Group, established in 1981, has one of the largest international networks of Islamic banks and investment companies. The subsidiaries include Faysal Islamic Bank of Bahrain and Manama-based Islamic Investment Company of the Gulf. Associated companies include Faisal Islamic Bank of Egypt and Faisal Finance Institution Turkey. The network covers 17 countries worldwide. At the end of 1994, the consolidated group assets were $917 million, while funds under management reached $2,825 million.
Mi said the management is not proposing any divestment of holdings, but instead aims to give subsidiaries and associated companies greater independence and more opportunities to take the initiative. ‘We will manage them by objectives rather than telling them to tell us everything that they do,’ he said. Further details will be made public after the board of directors meets to discuss the plans.
In an interview with the London-based daily Al-Hayat on 1 February, DM1 Group chairman Mohamed al-Faisal al-Saud said the restructuring would also involve an expansion of the group’s network. He said the group is studying plans to open three Islamic banks, including institutions in Malaysia and Indonesia. At present, the group only has a representative office in Indonesia.