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Thu 7 Feb 2008 12:16 PM

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Ajman Bank to detail IPO plays Monday

Islamic lender aims to become UAE's seventh largest sharia-compliant lender with initial public offering.

Ajman Bank, a sharia-compliant initiative by the emirate of Ajman, plans to give details of its initial public offering on Monday as it seeks to create what would be the UAE' seventh Islamic lender.

Ajman, the second-smallest member of the UAE federation by population, last year won initial approval from the UAE central bank to set up the lender with share capital of about 2 billion dirhams ($544.7 million), Al-Bayan newspaper reported in March, without saying how it got the information.

Ajman government will put up 25% of the capital and raise the rest through an IPO open to UAE citizens, the newspaper said. HSBC Holdings is advising on the IPO.

"We will make an official announcement on Monday," Yousif Khalaf, the bank's chief executive, told newswire Reuters on Thursday, declining to the give further details. Khalaf was previously CEO of Bahrain Islamic Bank.

The bank's communications advisers, FD, on Tuesday invited media to a Monday briefing "to announce the IPO of a new UAE-based bank". It did not give details.

UAE bank assets that comply with Islamic law - including a ban on the receipt of interest - are growing at a faster rate than for conventional assets as demand for belief-based financial services surges, according to bankers, including Abu Dhabi National Islamic Finance CEO Aref Al-Khouri.

Noor Islamic Bank, which is 25% owned by the government of Dubai and 25% by the emirate's ruler, Sheikh Mohammed bin Rashid Al-Maktoum, started operations last month as the UAE's sixth Islamic lender.

Abu Dhabi plans to start operations of its sharia-compliant Al Hilal Bank in June. (Reuters)

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