Plans afoot to set up Islamic megabank

A long-touted $3 billion (Dh11.01 billion) Islamic megabank is more likely to be established in Bahrain although a final decision has not yet been made, the chief executive of Al Baraka Bank, who also serves as an adviser for the project, said Tuesday. Adnan Ahmad Yousuf said discussions are still on about whether the bank will be domiciled in Bahrain or Qatar and no dates have been finalised to launch the entity. "While the location of the bank is still under discussion, in all probability it will be based in Bahrain," Yousuf said in an email to Reuters yesterday. Proposed entity Article continues below The proposed entity will be named Istikhlaf Bank and will be incorporated with an authorised capital of $10 billion and paid up capital of $3 billion, Yousuf said. His remarks came after a Bahraini newspaper report last week that said the Islamic megabank will be set up in Manama. The report said the announcement would be made formally during the Organisation of Islamic Conference meeting to be held in Qatar in December and the bank would be launched in January. "It's all speculation," said a second source close to the project. "There is no firm date yet however work is in progress on deciding the location and management of the bank." The fragmented Islamic finance industry lacks sufficient capital to compete with the Islamic units of Western banks on mandates to syndicate loans, arrange Islamic bonds and supply project finance in the Gulf Arab region.