Dubai Bank, a unit of Dubai Banking Group, plans to become a major global Islamic lender over the next five years through acquisitions and has set up a $5 billion (Dh18.3bn) financing programme to aid expansion, its chief financial officer said yesterday.
The bank has "pretty much the same aspirations" as group affiliate Noor Islamic Bank, which is aiming to be the world's largest Islamic bank within five years, Ahmed El Shall said.
"We have a specific strategy to be by 2011 a major force to contend with in the Islamic bank arena," he said. "[Within five years] I can see Dubai Bank almost on a global basis and represented in Europe, very much in Asia and Africa as well as at a regional level in other GCC countries."
Dubai Banking Group, a unit of Dubai Holding, has a 40 per cent stake in Bank Islam, Malaysia's oldest and largest Islamic bank, and a 40 per cent stake in ACR Re-Takaful Holdings, the world's largest reinsurance company.
The group is looking to continue its expansion into Asia and Africa and would use the Dubai Bank brand to enter the banking sector in those markets, Shall said.
"It will be a combination of organic and acquisition [based] growth... There are negotiations for joint ventures with certain countries whereby the target is to make sure we have control of an existing business," he added, declining to be more specific.
Dubai's Government and 15 other individuals put Dh3.16bn into Noor Islamic Bank in 2007 and the bank has set a five-year target to become the largest Islamic lender.
Shall, whose bank has a capital of Dh2.2 billion including reserves, said there was room for two large Islamic institutions within the same company, although acknowledged that in the long term it may make sense to merge the two.
"Looking at the future, it would not be out of the question if you see that one of the entities acquires the other one," Shall said, adding that there were no such plans at the moment.
The bank, with assets of about Dh16bn, has also set up a $5bn medium-term note programme to help finance the proposed expansion, although the bank is waiting for the "opportune" moment before tapping the debt markets. "All options are on the table... we're looking at the sukuk [Islamic bonds] market and syndicated loans," Shall said, declining to identify the banks mandated to arrange the programme.