Bahraini Islamic lender Al Baraka
plans to buy an Indonesian bank this year for around
$100m and has identified up to four possible options, its
chief executive said on Tuesday.
"We sent in early February a delegation...to follow up on
our expansion plans in Indonesia. I think the Indonesian market
is a good market," Adnan Yousif said.
"We want to buy a bank. We have looked into several options
and now we have three or four banks that we are eyeing, from
which we will buy one bank."
"It is a classical bank and we will turn it into an Islamic
bank. Our budget for that is around $100m...it will be
[finalised] in the third quarter of this year," Yousif said.
Indonesia is becoming an increasingly attractive market for
Islamic finance since the government took steps to change laws
to accommodate the nearly $1 trillion industry.
Baraka bank has shown great interest in the Asian market
including Malaysia and Pakistan, where it merged its Pakistan
unit with Emirates Global Islamic Bank last year.
Yousif said his bank was also looking at expanding in Saudi
Arabia and signed an agreement to acquire 60 percent of a Saudi
investment company. He refused to name the company.
"We have signed a deal to acquire 60 percent of a listed
Saudi firm, it is an investment Saudi firm."
"Now we are waiting for the Saudi authorities to finalise
the procedures. We have got the initial approval from Bahraini
and Saudi authorities," he said.
"We expect to get [final approval] within a month. The
acquisition is around $30 million to $40 million. We took it
because we want to expand.. in offering Islamic investment
Yousif said that the bank's Turkish unit is going to issue
Sukuk of $300m in May while Egypt's unit will issue sukuk
of $150m at the end of the year.
"We are doing this to increase our budget, this is
considered customer deposits but a long term deposit," he said.
Albaraka Turk Participation Bank is the largest unit of Al
Baraka and the first bank in Turkey to operate on Islamic
Yousif also said the bank has postponed a planned $200m to $500m sukuk to the third quarter of the year.
The sale was initially planned for Q1 this year.
Political conflicts and anti-government protests have
rattled financial markets in the Middle East, prompting some
banks and investors to delay corporate activity and fund-raising
Rating agencies have downgraded Bahrain and several banks,
while retail lender Bahrain Islamic Bank postponed a
planned $143m rights issue.
Bankers also expect a planned $1bn Bahrain sovereign
bond issue to be delayed as the Gulf Arab kingdom grapples with