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Dubai: Emirates Islamic Bank (EIB), the Islamic bank belonging to the Emirates NBD Group, plans to double its capital and branch network this year, Ebrahim Fayez Al Shamsi, chief executive of EIB, told Gulf News in an exclusive interview.
One of the fastest growing Islamic banks in the country, EIB's balance sheet size is about Dh20 billion. To fund its rapid expansion and meet the mandatory capital adequacy requirements, the bank would almost double its capital during the course of this year.
"We are a fast-growing bank, with our current asset size near Dh20 billion. As per the central bank's requirements, we need to increase our capital to Dh1.5 billion from the current Dh800 million," said Al Shamsi, adding that it is up to the owners of the bank, the Emirates NBD Group, to decide how to raise the capital. Earlier this year, the Emirates NBD management said the group has no immediate plan to sell the shares of EIB through an initial public offering (IPO).
Options
"Whenever we need capital infusion, they find the solution. Ultimately it is their decision if they want to sell the shares of the bank to raise additional funds. As far as we are concerned, our funding needs are adequately addressed by the group. Currently Tier 2 capital is one of our key sources of funding. Of course, an IPO could be an option as and when our owners decide," he said.
The bank, which has reported more than 10 times asset growth during the past three and a half years, is seeking to aggressively expand within the UAE and the region. "Between 2004 and 2007, deposits have grown 10 times, equity has increased almost 1.5 times and profit by about 10 times," said Al Shamsi.
The bank started operations as an Islamic bank in October 2004 with a network of nine branches. Today it has 23 branches in operation and five branches under construction. "We plan to open 10 more branches this year taking the total number of our branches to 40 early next year," he said.
The bank is currently evaluating the potential of launching operations in some of the key Asian and European markets.
See also Page 32
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