Posted on 04/19/2009 8:48:39 PM PDT by marshmallow
DUBAI -- Persian Gulf investors plan to open a new $10 billion Islamic bank by year end in Bahrain, the chairman of the Union of Arab Banks said Sunday.
The institution would be called "Istikhlaf Bank" and its shares would be listed on the Bahrain Stock Exchange and Nasdaq Dubai via an initial public offering, Adnan Ahmed Yousif said.
"We call it the godfather of Islamic banks," Mr. Yousif told reporters on the sidelines of a banking conference.
The proposed bank "will be established with a $10 billion capital and right now we are at a stage of forming the shareholders," he said. "There will be a private placement of $6.5 billion, and we plan a $3.5 billion initial public offering for the bank."
Mr. Yousif didn't say when the placement would take place but did say the IPO is targeted for the fourth quarter.
The proposed bank comes amid a downturn in Islamic banking in the region. Global issuance of Islamic bonds, or sukuks, tumbled 37% in the first quarter of the year to $1.8 billion, according to the latest data from the Zawya Sukuk Monitor.
The bank may also struggle to compete with larger, more established rivals such as Saudi Arabia's Al Rajhi Bank, the Middle East's largest traded Islamic bank, with a market value of $25.2 billion, according to Zawya.com.
Still, Islamic banks, which comply with Shariah laws that prohibit the charging of interest, are on the rise in the Middle East, where conventional banking practices are being held partly responsible for the global economic downturn.
(Excerpt) Read more at online.wsj.com ...
How does a bank survive that doesn’t charge interest?
It’s gonna launder money big time... oh yeah.
They just call “interest” something else....like a user fee or something....it’s a shell game....
"We call it the godfather of Islamic banks," Mr. Yousif told reporters on the sidelines of a banking conference.
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