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DIG plans $1bn investment bank

Dubai Investment Group (DIG) plans to establish a $1 billion investment bank and acquire a number of smaller financial institutions in the region, its chairman said yesterday.

Speaking at the World Economic Forum in Jordan, Soud Ba'alawy said the new Dubai-based bank would be set up within the next seven months and focus on the Gulf region in the first couple of years, before expanding its reach into markets such as Turkey and central Asia, Bloomberg reported.
Ba'alawy said DIG, part of the government-owned Dubai Holding, would also buy "two or three" banks in the region, with the plan of merging these into the new investment bank in "five to ten years".

"Dubai [Investment] Group will be the largest financial conglomerate in the region," he claimed.

The new entity will be competing directly with Shuaa Capital, the UAE's biggest investment bank, and EFG-Hermes, the largest publicly traded investment bank in Egypt.

The bank will also face competition from international rivals such as Deutsche Bank and Merrill Lynch, both of which are beginning to establish a presence in the region.

Ba'alawy said DIG also planned to expand its three commercial banks in Cyprus, Malaysia and newly-established Al Noor Islamic Bank in the UAE.

DIG's portfolio includes numerous investments real estate, financial and telecommunications. Last year DIG bought a 40% stake in Malaysia's Bank Islam, and in 2005 the group paid $450 million for the Essex House hotel in New York City, US.

The group's other assets include telcos Tunisie Telecom and Maltacom, Thomas Cook in India, Greece's Marfin Financial Group, and two shopping centres in Germany.

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