ADCB plans Islamic unit after year delay

ISLAMIC FINANCE: ADCB said it plans to set up an Islamic unit this year. (ITP Images)

Abu Dhabi Commercial Bank (ADCB) said it on Tuesday it plans to set up a unit this year offering services that comply with Islamic law, including arranging the sale of Islamic bonds.

The project is about a year behind schedule. ADCB Chief Executive Eirvin Knox said in July he hoped to get the unit operational by the end of 2007. Operations will now start in the fourth quarter, Ala Eraiqat, ADCB's deputy CEO, told newswire Reuters.

"ADCB shall launch its Islamic banking services unit based on a double fold strategy; through the provision of sukuk, in addition to the establishment of small and medium enterprises," the bank said in an earlier statement.

Sukuk are Islamic bonds that comply with a religious ban on the receipt of interest, and instead pay a rent or profit based on underlying assets such as property.

ADCB said in March it won Malaysian approval to buy 25% of RHB Capital, Malaysia's fourth-largest lender, and could conclude the deal in April. RHB Capital is an Islamic bank.

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