MANAMA, 25 October 2007 -- Bahrain-based International Investment Bank (IIB) has acquired a 49 percent stake in Azerbaijan's Amrahbank, one of the fastest growing banks in the country, in a move to convert the Azerbaijan institution into a full-fledged Islamic commercial bank offering high-quality Islamic financial products and services.
IIB is targeting an annual internal rate of return in excess of 21 percent from the venture.
Amrahbank has been in operation since 1993 and has a network of 20 branches across the country with more than 250 employees. Excluding the state-owned International Bank of Azerbaijan, Amrahbank is currently the most profitable bank in Azerbaijan in terms of return on equity.
The World Bank has reported that Azerbaijan is the world's fastest-growing economy with average growth rate of more than 30 percent in the last two years.
"The main economic and demographic indicators point to a huge potential for growth in the financial services sector in Azerbaijan and more specifically, to an untapped demand for Islamic banking products and services," IIB Chief Executive Aabed Al-Zeera said.
"We believe this investment will benefit from the fast economic growth and the recent developments in the banking industry, where Amrahbank can seize the benefits of being a pioneer in the provision of Shariah-compliant financial products and services in Azerbaijan.
"This is our first investment in Azerbaijan and we believe that the time is right for our investors to benefit from the growth of the economy and the financial services sector." "However, it is not the first time that IIB takes Islamic banking into a new frontier. IIB is a founding shareholder of the European Islamic Investment Bank in the UK, the first Islamic investment bank licensed by the Financial Services Authority," he added.
"We are proud of Amrahbank's past and current performance and with the support of IIB, we intend to continue on that growth path," Amrahbank supervisory board chairman Yunis Ildirimzade said.
The acquisition follows IIB's recent $197 million offering in relation to the development of a commercial real estate project located within the Danet Abu Dhabi Master Development Project in Abu Dhabi, and its acquisition of a portfolio of three commercial buildings worth $220 million in Germany.
© Arab News 2007
