Albaraka sees '09 net profit flat

Bahrain's Albaraka sees full-year net profit at about last year's level as it invests in its banking systems and opens new branches. It also plans to list its Syrian unit, its chief executive said on Tuesday.Albaraka, Bahrain's largest Islamic bank by market value, is in an inward-looking phase of its development, as it consolidates the group's operations in twelve countries before eying new markets in Asia and Europe at a later stage.

"By the end of the year, we will be close to our profit of 2008," Adnan Ahmed Yousif told Reuters in an interview.

"I don't think so," he said when asked whether profit could slightly grow. "This year we have a lot of expenses in our core banking system."

The bank's operating expenses rose 7.4 percent year-on-year in the first quarter. It posted a net profit of $201 million for 2008.

Albaraka is in the process of rolling out new core banking systems in its units and plans to open 54 branches this year.

Yousif said the bank had no exposures to troubled Saudi groups Saad and Al Gosaibi, which are undergoing debt restructuring.

Meanwhile, the planned $100 million initial public offering of its Syrian unit will go ahead this summer, he said.

"We're now working on the prospectus for the transactions, before August it will be launched," he said.

Albaraka is in talks with France's government over entering the country which is home to Western Europe's largest Muslim community.

Yousif said that as elsewhere, Albaraka would look to enter the market by acquiring a majority stake in a local bank.

"When we go to any country, we don't do it by minority interest, we do it by majority interest," he said, adding that the bank has no plans to start operations in France this year.

The bank is also eyeing China, India and Indonesia, where it plans to turn its representative office into a fully fledged commercial bank by the end of 2009 or next year, Yousif said.

Yousif said plans for a new $10 billion Islamic bank initiated by Saudi billionaire and Islamic finance pioneer Sheikh Saleh Kamel are going ahead with the private placement for investors now being prepared.

Yousif acts as an adviser to the project led by Sheikh Saleh, who also chairs Albaraka. (Reuters)