Bahrain's United Gulf buys into Dubai Islamic unit

EXPANSION DRIVE: United Gulf has agreed to take a stake in Dubai Islamic unit Millennium to help expand in the region. (Getty Images)

Bahrain's United Gulf Bank has agreed to buy a stake in Dubai Islamic Bank unit Millennium Finance Corporation to help it expand in the Middle East, Africa and Asia.

United Gulf, a unit of investment firm Kuwait Projects Company (Kipco), did not disclose the size or value of the stake in a joint statement with Dubai Islamic, the Gulf's third-biggest Islamic lender by market value.

Kipco, which owns stakes in about 50 companies and operates in 21 countries, said last week it wanted to expand into markets from Saudi Arabia to Algeria by investing in financial services firms.

The banks signed the Millennium deal on February 25, they said.

"With its regional experience in financial services, media and technology, Kipco will support Millennium Finance in its expansion plans across the Middle East, Africa and Asia," Masaud Hayat, managing director of United Gulf, said in the statement.

Shares of United Gulf surged 6.58% on the Bahrain bourse on Sunday after news of the deal with Millennium, set up in 2006 to establish seven private equity funds investing in mainly unlisted firms in sectors from energy to telecoms.

Last year, Millennium was the sole financial adviser for Arcelor Mittal's $2.2 billion African iron ore project.

United Gulf Assistant General Manager Shawki Khodr and Millennium Finance Chief Executive Keba Keinde declined to give details of the agreement when contacted by newswire Reuters.

Gulf Arab banks, buoyed by an economic windfall of record oil prices to Gulf oil producers, are looking outside their home markets, where greater competition is encouraging them to expand through acquisitions and branch expansion.

United Gulf planned to sell its stakes in several Arab commercial banks in deals worth more than $1 billion, Kuwait's Al-Rai daily reported last week.

After the report, confirmed was in talks to sell part of its investments, but gave no further details. (Reuters)

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Bahrain's United Gulf buys into Dubai Islamic unit
Posted by Firozali A MUlla MBA PhD, DUBAI, UAE on Tuesday 1 April 2008 at 23:13 UAE time

I have two notes here please read these with very open mind. I will appreciate this.

Number one. When I try to read your column there is an advertisement that knock my PC of hence I make typo errors in the letters and my articles to you.

Can you shift this in the place where it comes to fewer disturbances? Street would be a good place if this were overdue for payments.

Number two. I am happy that the Islamic bank is taking the role not just inhere but I watch the BBC talk of these banks and the training that is given to the staff about the Sharia elements of interest etc.

Believe me I am all for the Islamic way of thinking when it comes to the banks fleecing of my hard earned money by interest with interest.

There is simply no hole filled when you take a loan and try to pay back.

The interest is so huge that after the death of the borrower the son be asked to pay. I have nothing against the bank procedures of interest however I need another window to breathe as time are difficult these days when rice etc go up and income stays stagnant.

No Offences .Any person hereby stated does not exist and is purely coincidental and no relations to any alive if after paying the interest and to the dead who pay even now.

I mean this.

I know of some who had taken a small loan for PCs to run a college. The gentlemen paid for five years had to sell his house to pay the loan. That is what interest does; let not the banks tell you otherwise.

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