$200b capital base likely for proposed Islamic bank |
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Monday, Apr 20, 2009
Gulf News
Dubai: The proposed largest Islamic bank, which is facing a delay due to the global financial crisis, aims to have more than $200 billion (Dh734 billion) in capital when it is finally launched, the man behind the idea said.
Shaikh Saleh KamelShaikh Saleh Kamel
, president of Saudi Arabia's Dallah Albaraka GroupDallah Albaraka Group, said potential partners are reviewing the situation before committing to the bank, which will be located in Bahrain.
The bank's main shareholders will be the Islamic Development Bank (IDB)Islamic Development Bank (IDB), the Jeddah-based multilateral lending agency, Albaraka GroupAlbaraka Group, Kuwaiti Real Estate BankKuwaiti Real Estate Bank and 10 other banks, KamelKamel told reporters.
"All steps were taken to announce it in the first quarter of 2009," he said, adding that amid the global financial crisis most of the shareholders "are studying their situation".
The founders will contribute $1 billion and $10 billion will come from public shareholders, while $100 billion each will be raised from investment funds and through sukuk issues, KamelKamel said.
Asked when the final plan for the bank will be ready, he replied: "Only God knows."
KamelKamel said with confidence in the global financial institutions shaken, it is the right time to launch the proposed bank.
"Now the need for it is clear," he said.
Adnan Ahmad YousufAdnan Ahmad Yousuf, chairman of the Union of Arab Banks, was quoted by Reuters as saying that the new bank was in the "final stages" of establishing its founding shareholders and would be formed by the end of this year.
YousufYousuf said the bank had attracted eight parties so far as part of private placement. YousufYousuf said by the end of the year there will be a private placement and an initial public offering of shares.
"The IPO will be about $3 billion and will be listed in Bahrain and Dubai," he said, adding it would be listed on Nasdaq, DubaiNasdaq, Dubai and would take place in the fourth quarter. Ernst & Young is advising on the bank's formation, he said.
Earlier in his speech at the Union of Arab Banks conference, KamelKamel hit out at the practices of the Wall Street banks.
He described derivatives, the financial instruments whose values are derived from the other assets, such as real estate, bonds or shares, as "devilish mechanisms that have destroyed the world".
He said financial markets have to be connected with the real economy, and called for the establishment of "proper rules" by regulatory authorities for financial institutions.
Derivatives linked to the US mortgage market have been blamed for starting the global financial crisis.
© Gulf News 2009. All rights reserved.
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