The Bahrain-based Islamic bank expects final approval to incorporate its unit in Morocco next month.
By Mohamed El Agamy
Bahrain-based Al Baraka Banking Group plans to expand its network in Pakistan following its merger with Burj Bank, CEO Adnan Ahmad Youssef told Zawya.
“The Group's strategy in the Pakistani market is built on expansion in all Pakistani cities. We have more than one option to achieve this goal; either by opening more branches or by acquisition of other banks," he said in an email interview earlier this month.
Al Baraka Banking Group, one of the Gulf’s top Islamic banks, said last month that its Pakistani unit would merge with Pakistan’s Burj Bank to create an institution with assets totaling more than $1.1 billion.
Burj Bank’s 74 branches will be added to those of Al Baraka Bank (Pakistan) to form a network of 224 branches. Al Baraka Bank (Pakistan) aims to increase the number to 300 branches in the next four years, Youssef said.
The merger is expected to take effect from the last quarter of this year, and the Bahraini bank will be the major shareholder in the merged institution, according to Reuters.
Pakistan luring Gulf interest
Youssef said there is growing interest from Gulf Arab firms in Pakistan as the country’s economy is growing at “reasonable rates with relatively low costs” in comparison with other countries in Asia.
Pakistan is an attractive investment opportunity being home to the second largest Muslim population in the world after Indonesia and has agricultural wealth, industrial infrastructure and trained labour, he said.
"Pakistan needs Gulf states as they are a major source of crude oil, a major regional investor, a market for commodities and labour and a possible source for financial facilities," Youssef said, citing statistics putting remittances from Pakistanis in the GCC at $10 billion between July 2015 and April 2016.
He said the UAE has invested more than $9.5 billion in Pakistan in the last four years and that investments are expected to reach $15 billion by 2020.
"The Gulf region is the biggest foreign investor in Pakistan's public and private sectors. Experts estimate investments volume in the real estate sector at over $4 billion,” he added.
Al Baraka Banking Group is also setting up in Morocco after the North African nation introduced legislation allowing Islamic banks into the domestic market.
Youssef said the group completed all incorporation procedures of Al Baraka Bank Morocco. "We are awaiting the final approval to incorporate the banking unit, expected to be issued next month. With it, we complete our network in almost all Arab Maghreb countries.”
Al Baraka Banking Group is licensed as an Islamic wholesale bank by the Central Bank of Bahrain. It is listed at Bahrain bourse and Nasdaq Dubai stock exchanges.
The group has subsidiary banking units and representative offices in 15 countries. It runs more than 650 branches in Turkey, Jordan, Egypt, Algeria, Tunisia, Sudan, Bahrain, Pakistan, South Africa, Lebanon, Syria, Iraq and Saudi Arabia, in addition to two representative offices in both of Indonesia and Libya.
The group's authorized capital is $1.5 billion according to the data published at the group's website.
(Editing by Mohamed Abdulzaher)
© Zawya 2016