Ajman Bank sees break even by Q4 or earlier - CEO

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AJMAN BANK: Set to break even by Q4, CEO says in interview. (Getty Images)

Islamic lender Ajman Bank, which scaled back its expansion plans due to the financial crisis, expects to break even by the fourth quarter, a top official said.

The lender, which began operations at the start of 2009, aims to open 10 new branches next year, acting Chief Executive Ali E. Al Shaqoosh Al Mueen said on Monday.

"Due to economic and financial issues in the market, the board thought we should not hurry," he said.

The bank, one of eight Islamic lenders in the UAE, downscaled its pan-regional ambitions, including the opening of 15 new branches this year. Instead, it will have eight new locations in 2009, Mueen said.

The bank, whose founders include the ruling family of the emirate of Ajman, is slated to release second-quarter results in the coming week. It reported an 11.6 million dirham ($3.16 million) loss in the first quarter.

"Our target is to break even by Q4, maybe even earlier in Q3," Mueen said.

He added that Ajman Bank is interested in participating in a $10 billion bond issue from the Dubai government but that few details were yet available.

"At this stage, we have additional liquidity and we can go for any sound investment. Dubai bonds are a very secure type of bond, so why not?," Mueen said.

Dubai is readying the second tranche of a $20 billion bond issue launched in February, to help state-linked firms facing difficulties in the economic downturn. The UAE central bank took up the first, $10 billion tranche. The second tranche is open to local and foreign investors.

Mueen said that the bonds were not available yet and its investment would depend on the issue's terms and conditions. He expects the bond issue to be completed in the third quarter and to generate significant interest among local banks.

Some analysts say the UAE banking sector is ripe for consolidation due to the relative high number of lenders, but Mueen said his bank won't participate.

"There is no activity, no plans to merge or to be consolidated," Mueen said. (Reuters)

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