Faysal Islamic Bank of Bahrain, the Manama-based Islamic commercial bank, is to convert its Pakistani operations into a locally incorporated entity and list its shares on the Bahrain stock exchange this autumn.

The bank, which is 60 per cent owned by Dar Al Maal Al Islami Trust (DMI) of Geneva, has also reported a net profit of $6.2 million for the first half of 1994. This is 14 per cent higher than in the equivalent period of 1993. Total assets at the end of June were $237.2 million, barely changed from the figure at the end of 1993. Funds under management were $1,052.7 million (MEED 15:4:94).

The move in Pakistan calls for Faysal Islamic’s three branches to be incorporated as a local, full-service commercial Islamic bank. The equity of the new entity, called Faysal Bank, is to be 60 per cent owned by Faysal Islamic. The rest is to be floated in a share offer in Pakistan that is to be launched by the end of September.

The new bank has equity of Rs 1,100 million ($55 million). Plans call for three new branches to be opened immediately and for Faysal Bank to have at least 15 branches in Pakistan by the end of 1997. The existing branches are in Faisalabad, Karachi, and Lahore.

Former governor of the Central Bank of Pakistan Alam Hanifi has been appointed chief executive of the new bank. Muner Kamal, a former Citibank executive, is to be chief operating officer.

The bank has also been given permission to list its shares on the Bahrain stock exchange. This will take place no later than September. The bank applied to be listed in 1992 and it has announced that it wants to increase the number of shareholders (MEED 4:12:92). In December 1991, the bank doubled authorised capital to $100 million. Paid-in capital was increased to $70 million from $50 million in the first half of 1994.

Faysal Islamic Bank was incorporated in Bahrain as a 100 per cent DMI subsidiary in 1982. In 1991, DMI sold 40 per cent of its equity to leading Saudi Arabian investors in a private placement. Around the same time, Faysal Islamic’s chairman Prince Mohammad al-Faisal said he received approval from the king to set up a bank in Saudi Arabia (MEED 4:12:92, Saudi Arabia). This called for a new institution 40 per cent owned by Faysal Islamic, 25 per cent by the new shareholders in the bank and 35 per cent from new shareholders. Formal approval of the bank was never given and bankers say that the scheme is now dead.