12 Sept 2006
Dubai: Commercial Bank International, a 15 year old institution, plans to set up an Islamic banking subsidiary by early 2007 in a bid to benefit from the fast-growing industry segment, its chief said yesterday.
The bank, which unveiled a new logo and corporate identity yesterday, is also gearing up for a big retail push including a near doubling of its branch network and a trebling of the number of ATMs, in a year.
Khamis Mohammmd Buharoon, CBI's chief executive officer, told reporters the bank will hold a 40 per cent stake in its new Islamic banking unit that will be capitalised at Dh500 million.
Sixty per cent will be offered to strategic investors from around the Gulf including other Islamic banks and institutions.
He said Commercial Bank International will shortly begin offering Shariah-compliant products through a new Islamic banking window that will later be folded into the new unit.
"We will sign an agreement with a Malaysian software company tomorrow for the core Islamic banking solution," Buharoon said ahead of the unveiling of the bank's new logo.
Asset size
The subsidiary will begin operating by the first quarter of 2007, he said.
Commerical Bank International is one of 21 local banks operating in the UAE and one of 46 overall. It is 17th biggest by asset size among local banks and will double its equity capital to Dh1 billion by year-end through a one-for-one rights issue.
The bank hopes to benefit from the rapid growth in Islamic banking services, that is expanding nearly twice as fast as conventional banking. Several UAE banks, including the National Bank of Abu Dhabi and Mashreqbank, have announced plans to launch similar Islamic banking subsidiaries.
Mahdi Kilani, CBI's head of the retail banking, told Gulf News the bank aimed to boost the share of retail banking in overall revenues to 50 per cent in the next few years from just seven per cent now.
He said the bank will be spending millions of dirhams in adding six new branches to its existing eight and increase the number of its ATMs to 30 in a week from 18 now, and to 50 in a year.
Commercial Bank International will also pay great attention to beefing up its call centre operations and will offer a full suite of attractive personal banking products including credit cards, mortgages, personal and auto loans as well as Islamic products.
Kilani said the bank will aim for one-day approval for loans and offer attractive interest rates on them including 1.25 per cent a month on credit cards and 3.75 per cent on auto loans.
Commercial Bank International reported a net loss of Dh61.65 million in the first half of this year compared to a profit of Dh152.3 million a year ago.
Its shares closed 3.44 per cent higher at Dh3.78 on the Abu Dhabi Securities Market yesterday.
By Arif Sharif
Gulf News 2006. All rights reserved.
