New Islamic bank launched

20 October 2003
GCC investors have launched a new Islamic bank in the kingdom, aimed at capturing a slice of the burgeoning market for Sharia-compliant financial products. The Manama-based International Investment Bank (IIB)has received Bahrain Monetary Agency (BMA - central bank) approval and aims to begin operations by the end of the year. Abed al-Zeera is IIB's chief executive.

The bank's largest shareholder is the UAE's Al-Fahim Groupwith a 24 per cent holding. The remainder of the shares are held by institutional investors and high net worth individuals from all the GCC states except Oman. Doha Bankis the only financial institution taking a stake and will have a seat on the board. Initial paid-up capital is $43 million.

'We started at $43 million because we don't want to be burdened with too much capital,' says Al-Zeera. 'However, we are in discussions with a major European investment institution and several GCC investors who missed the boat first time around, and we plan to raise capital to some $75 million in the future, offering new shares to a selected group of investors.' IIB will specialise in real estate and the bank's first products are in the process of development.

Bahrain is at the forefront of efforts to develop Islamic finance. An eighth sukuk issue is scheduled for late October and in August National Bank of Bahrainwas granted a licence to open a wholly-owned Islamic subsidiary in the kingdom (MEED 26:9:03; 15:8:03).

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