Emirates Post to apply for Islamic bank licence

Emirates Post Holding Group will apply for a banking licence to create a postal Islamic bank this year, its top executive said. “We will apply for a licence in the next six months,” Emirates Post Holding Group President Abdulla Al Daboos told Emirates Business.

Although the UAE Central Bank has put on ice the issuance of any new licences, it has given the nod to Abu Dhabi-based Al Hilal Bank, taking the total number Islamic banks to seven in 2007. Moreover, due to the popularity of this form of banking, a number of banks have set up Islamic banking arms.

Al Daboos said Emirates Post will launch its initial public offering (IPO) in the second quarter of this year. “We haven’t decided yet on pricing. It is up to the government to decide how much stake is to be offloaded.”

Gulf companies are expected to raise about $10bn in 83 IPOs over the next three years, said Abu Dhabi-based Gulf Capital.

Emirates Post has been consolidating its presence in the financial sector. In a bid to tap the low-income and “unbanked” segment in the UAE, it tied up with Noor Islamic Bank last week. More than two million of the 4.4m population of the UAE is unrepresented in the country’s banking system, Al Daboos said. The new company will have a capital of Dh500m and will focus on launching debit cards, Islamic insurance, credit cards, micro-financing, salary payments, remittances and currency exchange.

“We want to establish ourselves in the market by introducing financial services with Noor. The joint venture will give us time to do due diligence and capital allocation,” Al Daboos said.

Emirates Post also owns 60 per cent of Wall Street Exchange Centre, with the remaining 40 per cent held by the India-based House of Patels.