Islamic Bank of Asia to tap Gulf markets - Emirates24|7

Islamic Bank of Asia to tap Gulf markets

The Islamic Bank of Asia, majority-owned by Singapore's DBS Bank, said yesterday it plans to expand across the Gulf and could eventually sell shares in an initial public offering.

The one-year old Singapore-based bank, which recently opened its first foreign branch in Bahrain, is aiming to bridge two of the world's biggest markets for Islamic banking, the Gulf and Asia.

"We need to be in more than two offices," Chief Executive Vince Cook told reporters at a news conference in Bahrain's capital, Manama.

"We would be keen to explore representation in Saudi Arabia, the UAE and Kuwait. Qatar is also on the agenda" he said.

Although the bank has found initial approaches to those countries favourable, it has not yet formally applied for licences, Cook said.

However, he gave no timeframe or outline of how the bank intended to expand in the region.

He previously told Reuters the bank could by a stake in a Malaysian bank as part of plans to expand in Asia.

The lender is looking at Malaysia, a global hub for Islamic banking, and Indonesia, the world's most populous Muslim nation, amongst other Asian countries.

"We would certainly consider listing the bank in an IPO," Cook said, but added it was likely the bank would wait until 2010 at the earliest.

There has been relatively little integration between Islamic banking centres in the Gulf and Asia, which Cook said was because of a "lack of familiarity" on both sides.

The Islamic Bank of Asia intends to tap the resources of its parent company to expand in the Middle East.

DBS is Southeast Asia's biggest bank by assets, and has recently said it plans to expand outside its established markets.

Some 80 per cent of the Islamic Bank of Asia's commercial banking activities will be focused on the Middle East, and a similar amount of investment banking activity will focus on Asia, Cook said.