Noor aims to be top Islamic bank

Dubai plans to create the world's largest Islamic bank within five years, spending as much as $1 billion on individual acquisitions in countries as far apart as Indonesia, Egypt and Britain, Noor Islamic Bank said.

Noor plans to spend between $500 million and $1 billion each time on a 'few' acquisitions in Europe, Asia and North Africa, chief executive officer Hussain Al Qemzi said yesterday.  "We aim to be the largest Islamic bank within five years," Qemzi said in his office in Dubai, two days after the lender officially started operations. "Acquisitions will be the main way because there is no time to grow organically," he said.

Demand for investments and financial services that comply with Sharia is growing among the world's 1.3 billion Muslims as they seek more ethical ways to invest their money.

Trend

Islamic lenders controlled assets worth about $750 billion at the end of 2006, a figure which may rise above $1 trillion by 2010 as the industry expands, according to US management consultants McKinsey & Co.  Saudi Arabia's Al Rajhi Bank, the world's largest Islamic lender, had assets worth $33 billion at the end of September.

In its acquisition strategy, "it would be better to do a few of a good size rather than many small ones," Qemzi said, with Egypt, and North African nations such as Morocco and Algeria at the top of the wish-list.  Noor aims to be the world's biggest Islamic bank by assets and countries of operation, with a focus on the largest Muslim nations such as Turkey, Egypt, Pakistan and Indonesia, Qemzi said.

"We also want to be in mature markets, such as in Europe, where the Muslim population is growing," Qemzi said, pointing to Britain, France and Germany.  Unlike conventional banking, where lenders such as Citigroup Inc and HSBC Holdings Plc dominate, there are no global Islamic banks.

HSBC, for instance, offers Sharia-compliant services through its Amanah unit, and Gulf lenders such as Kuwait Finance House and Al Rajhi Bank have expanded into countries such as Malaysia, where Muslims form a majority.

Branding

Noor, which plans to double its branches in the UAE to at least 20 by the end of next year, aims to mirror HSBC's global brand in the Islamic field, Qemzi said. "We were built to be global," Qemzi said.  The ambitions of Dubai have soared during the last few years, benefiting from an oil revenue windfall to the Gulf, the world's biggest oil-exporting region.

In 2006, it bought British port operator P&O for $6.8 billion, creating the world's fourth-largest container port handler. Last year, it bid $5 billion to buy Nordic and Baltic stock exchange company OMX AG for which it is seeking regulatory approval. Dubai plans to build two of the world's 10 largest financial institutions by 2015. It has already bought stakes in Standard Chartered Plc, HSBC and Deutsche Bank AG for about $4 billion.

Reference:
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