AMMAN - The Industrial Development Bank (IDB) will become Jordan Dubai Islamic Bank (JDIB) in a couple of months, pending the completion of certain procedures stipulated in an agreement signed Monday.
According to IDB Chairman Mufleh Akel, the rebranding of the bank and the new logo will be widely publicised in four or six weeks time, after fulfiling requirements associated with an acquisition contract.
Under the deal, a Jordanian-UAE consortium bought 52 per cent of the IDB by subscribing to 26 million shares offered to it in a private placement. As such, the bank's capital becomes JD50 million/shares instead of JD24 million/shares.
Samir Al Rifai, chief executive officer of Jordan Dubai Capital (JD Capital), told a press conference that the acquisition amounted to JD72 million.
Mufleh indicated that the cost was not based solely on the share's market price, but that other financial factors were taken into consideration as well, such as doubtful assets, provisions for bad debts, taxes and possibility of collecting some dues.
"The consortium will re-launch the Jordanian bank as a world-class Islamic financing institution that offers a full range of Shariah-compliant products for the Jordanian market," a press release prepared for the signing ceremony said.
The consortium consists of Dubai International Capital (DIC), Dubai Islamic Bank (DIB), and Jordan Dubai Financial (JDF) which is the investment arm of JD Capital and the largest contributor to the investment in this venture.
Considered to be its third and largest investment to date, JDF was a founder in Amlak Finance (Jordan) along with Amlak Finance (UAE), the Social Security Investment Unit, and other local investors, in order to provide a variety of Sharia-compliant mortgage products in Jordan.
JDF was also a founding member of First Insurance, a recently established company offering takaful insurance in Jordan.
In addition to owning a share in the IDB, the agreement allows DIB to provide the technical support and supervision needed to restructure the IDB according to international best practices, and to provide the IDB access to DIB's extensive experience in providing Shariah-compliant financing products.
"There has been a growing demand in Jordan for Shariah-compliant banking organisations. This trend has become more apparent in recent years, as Islamic banking tools have proved to be more efficient and flexible in meeting a variety of individual as well as corporate client needs," Al Rifai, said. "We look forward to benefiting from DIB's experience in the Islamic banking sector, as we aspire to become a comprehensive financial institution that provides the best services in the Jordanian market."
DIB Group Managing Director and Chief Executive Officer Khaled Al Kamda said: "We view this stake acquisition in the IDB as a significant milestone for all of us at the bank as it fits in perfectly with the DIB's strategy of growing its network and product reach in markets which have a strong demand for Islamic banking services. This agreement with the IDB allows us to enter the Islamic banking market in Jordan and extend the same award-winning business model that has seen DIB emerge as the leader in Islamic banking in the United Arab Emirates."
Al Kamda stressed the growing importance of Islamic banking telling journalists that even traditional banks are opening special windows for Islamic banking.
Central Bank of Jordan Governor Umayya Toukan attended the signing ceremony.
By Samir Ghawi
© Jordan Times 2008
