Bermuda is likely to see the first Islamic financial institution to be up and running by the yearend, reported Arab News on Monday.

The move will boost the chances for Bermuda becoming an emerging hub for Islamic banking and finance for the world's largest economy, the United States.

Deputy Premier and Minister of Finance Paula A Cox, who was in Bahrain last week and held talks during her two-day visit to Bahrain with Minister of Finance Sheikh Ahmed bin Mohammed Al Khalifa, said Bermuda was preparing to host the first Islamic financial institution by the yearend, reported the newspaper.

After talks with officials and bankers she was positive about the outcome of efforts aimed at establishing the first Islamic bank or Takaful company by the fourth quarter of the year, it said..

Bermuda's deputy premier said the double taxation agreement with Bahrain has helped to create an opportunity for both financial centers to create further synergies while working in Islamic banking, Islamic insurance and fund industry.

"The landmark double taxation treaty with Bahrain, the first of its kind in the region, has paved the way for possible cooperation in a variety of areas within the financial sector. We are certain that once the joint economic committee is announced this will look into all details of future cooperation," she said.

Talking about Bermuda's preparedness to enter Islamic banking and finance she said that the spadework has already been done and further cooperation with Bahrain would help create a proper climate for such institutions to grab opportunities.

During their stay, the 12-member strong delegation led by Cox explored the opportunities of cooperation with Bahrain in the fields of Islamic banking, Takaful and other areas of interest including capital markets, reported the Jeddah-based newspaper.