Ajman, a member of the United Arab Emirates federation, plans to raise Dh550 million in an initial public offering this month to create an Islamic lender as demand for belief-based bank services surges.
Family ruled Ajman, the second-smallest member of the UAE federation by population, will sell 550 million shares at one dirham each, equivalent to 55 per cent of the company, Ajman Bank said in a statement on Monday, ahead of a meeting with reporters.
The 10-day sale starts on Sunday. It values the bank at Dh1 billion and will be the UAE's largest IPO so far this year. It would be the seventh UAE lender that complies with Islamic law, which includes a ban on the receipt of interest. HSBC Holdings Plc is advising on the sale.
The Ajman government will put up 25 per cent of the capital and offer the remaining 20 per cent to financial institutions and individuals in a private sale.
Ajman Bank plans to open its first branch in Ajman -- which has a population of about 300,000 -- before covering the six other UAE members within two years, it said, without giving details. Abu Dhabi and Dubai are the biggest members of the UAE.
Citizens from outside the UAE can buy 100 million of the shares, which will be listed on the Dubai Financial Market, it said.
Ajman last year won initial approval from the UAE central bank to set up the lender with share capital of about Dh2 billion, Al Bayan newspaper reported in March.
UAE bank assets that comply with Islamic law are growing at a faster rate than for conventional assets as demand for belief-based financial services surges, according to bankers, including Abu Dhabi National Islamic Finance CEO Aref Al Khouri.
Noor Islamic Bank, which is 25 per cent owned by the government of Dubai and 25 per cent by the emirate's ruler, Sheikh Mohammed bin Rashid Al Maktoum, started operations last month as the UAE's sixth Islamic lender.
Abu Dhabi plans to start operations of its sharia-compliant Al Hilal Bank in June.
The UAE's biggest sharia-compliant lender is Dubai Islamic Bank, with a market value of more than $9 billion. (Reuters)
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