World’s biggest Islamic bank in the offing

The Bahrain-based AlBaraka Banking Group (ABG) is holding talks with other parties to set up the world's biggest Islamic bank before the end of this year, a senior Al Baraka official said.
In an interview with CNBC Arabiya, Adnan Youssef, CEO of Al Baraka Banking Group, said that its chairman Sheikh Saleh Kamel is heading an alliance to launch the world's biggest Islamic bank before the end of this year, with an initial public offering of US$3 billion (RM10.94 billion), according to a report by Emirates Business on Apr 1.
"We have already completed the necessary research for launching the Islamic bank and there are current discussions between Sheikh Saleh Kamel and investors to prepare for the public offering," said Adnan Youssef, who is also the chairman of the Union of Arab Banks.
Under the current economic climate, news reports said Sheikh Saleh Kamel did not withdraw or pull back but on the contrary, he is accelerating the finalisation process. "The Islamic banking industry needs this investment at such times," he added. The mega bank announced last year will have an initial capital of US$10 billion through a number of initial public offerings and private stock options.
In March, Moody's said Islamic financial institutions have been more resilient to the crisis than their conventional counterparts because direct investment in sub-prime assets is banned under Shariah law.
It was reported that a group of Gulf banks and investors planned to raise US$9 billion by selling shares in a planned Islamic investment bank, which will tap the rising liquidity in Muslim nations.
In June 2008, news reports quoted Sheikh Saleh as saying that the bank, tentatively named Ummar Bank, will have a paid-up capital of US$11 billion, of which US$2 billion will be raised via a private equity placement.
The new Bahrain-based Islamic investment bank was then reportedly seeking to raise as much as US$11 billion to start projects in all Muslim countries. With the emergence of better capitalised Islamic banks in the Middle East, bankers believe that consolidation is bound to take place, both locally and globally. - (The Malaysian Reserve, APril 2, 2009, p9)