The world's largest Islamic bank, Saudi Arabia's Al Rajhi Bank, has expanded its footprint by opening up operations in Jordan, according to local press reports.
Jordan is already served by the fully-fledged Shari'ah compliant bank, Jordan Islamic Bank, as well as the Islamic window offered by Jordan-based Arab Bank. In addition Dubai Islamic Bank operates a joint venture with its partner Jordan Dubai Capital, Jordan's Industrial Development Bank and the government of Jordan, called Jordan Dubai Islamic Bank.
Islamic banking is not an alien concept in Jordan, unlike in some of the MENA region. Last year the government of Jordan borrowed $100m from JIB, which was partially a vote of confidence in the sector following the financial crisis, and is undertaking a feasibility study into the issuing of sovereign Sukuk to help finance its budget.
And in April Jordan saw its first corporate Sukuk, issued by Al Rajhi Cement, which became the first company in the country to use Islamic finance to raise capital by issuing a $120m Sukuk to finance its domestic expansion projects.
However, the entry of Al Rajhi bank into the market is a different matter. The Islamic giant, in the game since 1957, brings a wealth of experience, a depth of product and a reservoir of expertise to the Jordanian scene.
The bank has started operations by launching two fully operational branches in Jordan's capital city, Amman, with more branches expected to launch in the near future at various locations nationwide.
The expansion into Jordan is part of an aggressive expansion strategy being carried out by Al Rajhi Bank's chairman and CEO, Abdullah bin Sulaiman al-Rajhi (left), who has taken his family's bank, which currently has assets in the region of $46bn, with paid-up capital of $4bn, from its heartland in Riyadh, Saudi Arabia to Kuwait and Malaysia and beyond.
In Jordan the bank has already introduced a range of products including current, savings and investment accounts, car and home financing solutions, card solutions and e-banking services, and is shaping-up to become the premier player in the nascent market on a retail and a wholesale basis.
The Jordanian subsidiary has paid up capital of JD50m ($70.5m). Unfortunately, the new bank could not provide a spokesperson for comment by the time The Islamic Globe went to press.
© The Islamic Globe 2011
