Ajman bank to focus on UAE market

STELLAR DEBUT: Shares in Ajman Bank have soared as high as five times their initial public offering price on their first day of trading on the Dubai bourse. (Getty Images)

Ajman Bank will focus on the United Arab Emirates' market for the coming five years but will look at other Gulf and Islamic countries for growth in the future, its chief executive said on Sunday.

Youssef Khalaf said the bank, whose shares traded at as high as five times their initial public offering price on their Dubai bourse debut on Sunday, expects to start making profit in the second half of 2008.

"The plan for the next five years is to focus on the UAE market and establish ourselves there," Youssef Khalaf told newswire Reuters.

"Beyond that we'll look to expand in the GCC and Islamic countries. We'll venture into activities that compliment our core business," he said, declining to be more specific.

Ajman Bank, the UAE's seventh-largest Islamic lender, faces growing competition amid rising appetite for sharia-compliant banking products.

"On the one hand there is more competition from Islamic banks, but there are also more opportunities because of the liquidity in the market, oil prices and the growing economy," Khalaf said.

"We've seen growth in Islamic banking. It looks like this trend will continue. There seems to be a preference for it."

Al Hilal, the newest of eight Islamic banks in the UAE, said last week it would start operations on June 21.

Ajman Bank shares opened at 2.85 dirhams ($0.776) and were trading at 4.07 dirhams at 0925 GMT compared with the IPO price of one dirham per share. They hit 5 dirhams earlier in the session.

The first-quarter initial public offering of Ajman Bank raised 550 million dirhams ($149.8 million), almost 86 times oversubscribed.

Demand for investments and financial services that comply with Islamic law - which includes a ban on the receipt of interest - is growing as Muslims seek what they see as more ethical ways to invest their money.

Islam also bans investment in companies dealing in alcohol, gambling and pornography. One in every five people is Muslim.

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. (Reuters)

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