Noor Islamic Bank has revised its timetable for growth in light of ongoing market uncertainty
- Date established: 2007
- Main business sectors: Islamic banking and finance
- Main business regions: UAE
- Chief executive officer: Hussain al-Qemzi
Established in 2007, Noor Islamic Bank (NIB) is a fully sharia-compliant commercial bank with a paid-up capital of $860m. It opened for business in January 2008 from its headquarters in Dubai.
NIB delivers a full range of banking, investment, financial and risk management products and services for individual clients, small and medium-sized businesses, corporations and government institutions.
At its launch, NIB offered three types of banking service: consumer, investment and corporate finance, but it has since gone on to introduce foreign exchange and remittance services. The bank’s products and services are governed by a sharia board, comprising Islamic scholars with experience and expertise in legal, financial and banking-related matters.
The ownership of the bank is split between Investment Corporation of Dubai (25 per cent), the UAE government (5 per cent) and Dubai Group, a subsidiary of Dubai Holding (25 per cent). The remaining 45 per cent is divided equally between 15 individual shareholders.
NIB is a subsidiary of Dubai-headquartered Noor Investment Group, which also owns Noor Takaful, an Islamic insurance company. Noor Takaful was established with a paid-up capital of $40.8m and offers a range of sharia-compliant aviation, marine, healthcare, family and life insurance products in the GCC.
The bank’s chairman is Sheikh Ahmed bin Saeed al-Maktoum, who is also the chairman of Emirates airline.
|Noor Islamic Bank in numbers|
|Assets in June 2009||$6bn|
|Capital adequacy ratio||21.3 per cent|
|Source: Noor Islamic Bank|
To date, NIB has structured and executed sharia-compliant debt market transactions by managing more than $16bn in syndicated financing and sukuk (Islamic bond) mandates. It has arranged finance for several high-profile companies based in the UAE, such as Islamic mortgage lender Tamweel, Emirates National Oil Company, Abu Dhabi’s Aldar Properties and AIG Global Real Estate. It has also arranged a $1.5bn commodity murabaha (Islamic financing) syndication for Dubai Financial Group.
In February this year NIB, along with
Bahrain’s ABC Islamic Bank and the UK’s Standard Chartered were mandated by Turkey’s Bank Aysa to arrange a $75m syndicated dual-currency murabaha financing facility, which will be used to fund Bank Aysa’s Islamic trade finance activities. The facility has a one-year tenor.
In June 2008, NIB opened its first overseas office in Tunisia. It will be responsible for investment and corporate banking, plus channelling investment opportunities from the GCC into North Africa.
The following month, the bank announced a joint venture with the government of the Maldives to establish the country’s first Islamic finance house, Noor Maldives Islamic Bank, with an authorised capital of $100m and a paid-up capital of $10m.
Today, NIB has 18 branches across the UAE – 11 in Dubai, four in Abu Dhabi, two in Sharjah and one in Al-Ain, plus a service centre in Dubai’s Mall of the Emirates and a network of 84 ATMs. One of NIB’s Dubai branches is the UAE’s first retail banking branch that is open 24 hours a day, seven days a week. In March this year NIB launched the UAE’s first Arabic mobile internet banking service.
NIB’s customers currently number more than 44,000.
NIB is considering several growth strategies. In particular, it is looking at private equity investment vehicles and funds and increasing its international presence, both within the GCC and further afield.
NIB was launched with a bold manifesto – of becoming the world’s largest Islamic bank by 2013. Consequently, acquisitions were expected to take precedence over organic growth and, to this end, the bank planned to spend between $500m and $1bn on acquisitions in Asia, Europe and North Africa by 2013. However, the bank is no longer working to this deadline, due to uncertainty in global markets about the liquidity, portfolio quality and fluctuations in value of the potential acquisitions that fit with the bank’s strategy.
NIB says Islamic banks have been lagging behind the market in their retail offerings and that opportunities for growth exist in this segment. Consequently, its focus this year is to continue to develop a wider range of retail products and services.