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Tue 22 Mar 2011 03:02 PM

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Abu Dhabi's Al Hilal Bank in profit, eyes expansion

Islamic bank makes first profit since launching in 2008; eyes additional branches in UAE and Kazakhstan

Abu Dhabi's Al Hilal Bank in profit, eyes expansion
HILAL BANK: The Islamic lender is finalising its next three-year growth strategy that would focus on investment banking among other growth areas

Abu Dhabi government-owned

Al Hilal Bank earned its first yearly profit in 2010 and expects

continued growth as it expands locally and overseas, its top

executive said on Tuesday.

The Islamic lender is finalising its next three-year growth

strategy that would focus on investment banking among other

growth areas, said Mohamed Berro said.

"Our first year of profit was purely from operations, no

one-offs. Despite the challenges, we found the market for

Islamic banking is getting bigger," Berro said.

The bank, which said it would break even in 2009 and become

profitable in 2010, earned AED140m ($38.12m)

last year.

Al Hilal Bank began operations in mid-2008 and is wholly

owned by the Abu Dhabi Investment Council, an investment arm of

the government of Abu Dhabi, capital of the UAE.

The lender was one of two Abu Dhabi banks to provide

financial support to troubled Dubai World in November

2009 at the height of Dubai's debt crisis.

Since its launch, Al Hilal Bank has opened 19 branches in

the UAE and plans to add at least four to five branches in 2011

as population growth and new products create demand for Islamic

banking, Berro said.

The bank also plans to open its third branch in Shymkent in

southern Kazakhstan this year as Islamic banking gains

popularity in the former Soviet state.

Al Hilal set up Kazakhstan's first Islamic bank last year,

Al Hilal Islamic Bank, with an intial capital of AED100m. It has two branches, in Almaty and Astana.

"There is a large Muslim population in Kazakhstan with

potential for growth but the challenge is in creating

awareness," Berro said.

Kazakhstan, central Asia's biggest economy, has been

positioning itself for growth in the Islamic finance industry,

with plans to issue a $500m debut Islamic bond this year.

In addition to its presence in Central Asia and the UAE, Al

Hilal is eyeing other overseas markets as part of its expansion,

Berro said, but declined to go into details.

"Our future plans will be disclosed when our next three-year

strategy is ready," he said.

As part of this new plan, Al Hilal plans to raise its

paid-up capital, secure ratings and expand its takaful, or

Islamic insurance, and investment banking business, he said.

The lender has an authorised capital of AED4bn and a paid-up capital of AED2bn.

($1=AED3.673)

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