Dubai's Noor Islamic says may break even in 2011

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The bank posted a profit of AED58m in the first four months of 2011

The bank posted a profit of AED58m in the first four months of 2011

Dubai's Noor Islamic Bank could break even in 2011, a year ahead of target, and will consider merger and acquisition opportunities later to expand overseas, its chief executive said on Wednesday.

Business has been unaffected by the Middle East conflict and the bank posted a profit of AED58m ($16m) in the first four months of 2011, Hussain Al Qemzi said.

"We've seen a lot of flow of liquidity and cash and we've seen a growth in retail and travel," Al Qemzi said in an interview on the sidelines of an Islamic banking conference in Singapore. "Actually, it's not negative."

Noor Islamic Bank focuses mainly on corporate banking deals such as sukuk issues. It is 25 percent owned by Dubai Investment Group, the investment arm of Dubai Holding which, in turn, is owned by the ruler of Dubai.

The bank had earlier said it expected to close a "healthy number" of Islamic syndicated loans and Islamic bonds in the first half of 2011, with Turkey emerging as an active market for Islamic finance.

Al Qemzi said sukuk deals would start flowing again after a slow 2010 but most issues would be of a smaller size. Traditionally Gulf issuers have tended to sell Islamic bonds in billions of dollars.

"We are working on a few transactions, we'll do some transactions in Turkey and we're also hopeful of the Asia market," he said.

A Gulf aid package for Bahrain and Oman would also create opportunities for sovereign Islamic bond issuance, he said.

In March, Gulf Arab oil producers launched a $20bn aid package for Bahrain and Oman to help them upgrade housing and infrastructure over 10 years, in the aftermath of anti-government protests.

Noor Islamic Bank could consider merger and acquisition opportunities after it becomes profitable, Al Qemzi said.

"We'll look at it in time, but I'd like to see us getting out of the woods and becoming profitable," he said."For us, I will look at banks that will really give us international reach."

Noor Islamic Bank had said it has no plans to merge with any other financial institution after being named as a possible candidate to absorb troubled Islamic lender Dubai Bank, which was recently taken over by the Gulf emirate's government.

When it first launched in 2008, the bank wanted to be the world's largest Islamic bank within five years through acquisitions in countries such as Indonesia, Egypt and Britain.

But difficult global market conditions have forced the company to rethink its strategy.

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