>Wednesday, Apr 22, 2009
Gulf News
Dubai: The planned mega Islamic bank will have its investment operations spread globally rather than restrict its activities to Muslim countries, the Saudi businessman behind the ambitious project said.
With more than $200 billion (Dh734 billion) of funds at its disposal, the as yet unnamed bank may find it easy to cast its net wide, believes Shaikh Saleh Kamel, president of Saudi Arabia's Dallah Albaraka Group, which will be one of the bank's founders.
"We will be all over the world. Economics has no one country or religion," Kamel told reporters on Monday. "We will invest where we can make profit."
The bank's founders will contribute $1 billion in equity and $10 billion will be raised by offering shares to the public. Another $200 billion will come from sukuk issuance and investment funds.
Kamel said raising such a big amount will be "very easy if God wills and all the people [involved in the project] work together."
According to some estimates, Islamic banks currently have some $700 billion in total assets.
The bank, which will be located in Bahrain, has the backing of key Islamic countries such as Saudi Arabia and Malaysia.
It will be a wholesale investment bank involved in "real investment, not like Lehman Brothers," said Kamel in reference to the speculative investments of the failed Wall Street bank.
In a speech at the Union of Arab Banks conference he had earlier assailed Wall Street's controversial investment practices and trading in derivatives, the financial instruments whose value is based on other underlying assets such as bonds, shares and real estate.
The mega bank's launch has been delayed because potential shareholders are holding on to their funds in the current financial crisis.
Two possible names being considered for the bank are Al Imar and Al Istikhlaf, but any Arabic name "that gives the meaning of development" will eventually be chosen.
Among the main shareholders will be the Islamic Development Bank (IDB), the Jeddah-based multilateral lending agency, Dallah Albaraka Group, Kuwaiti Real Estate Bank and another 10 banks.
Kamel said most Islamic banks in the Gulf, including Abu Dhabi Islamic Bank and Dubai Islamic Bank, have been invited to participate in the venture.
© Gulf News 2009.&All rights reserved.
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