Malaysia’s most established Islamic bank, Bank Islam Malaysia Berhad (BIMB), has clinched its first operating venture overseas in Pakistan, via an international consortium.
The five-party consortium was granted approval by the State Bank of Pakistan end April to set up a full-fledged Islamic banking operation.
Named First Dawood Islamic Bank, the bank is expected to commence operations within six months. It will have at least five branches within a year of its incorporation.
The consortium consists Bank Islam from Malaysia, First Dawood Group, an established Pakistani financial services player; Unicorn Investment Bank from Bahrain, Islamic Corporation for the Development of the Private Sector (ICD), a wholly-owned subsidiary of the Islamic Development Bank, Jeddah; and Azam Essof Kholia, a private equity holder
Upon commencement of operations, the bank’s paid up capital is PKR two billion (estimated at RM128 million), of which Bank Islam owns 25 per cent.
“This venture is a part of Bank Islam’s plans to expand to the Middle East and Asia Pacific markets. The new bank in Pakistan will draw heavily on Malaysian technology which Bank Islam already has in hand,” said Datuk Noorazman Abdul Aziz, Managing Director of Bank Islam.
“Pakistan is a key market because it is one of the fastest growing economies in that region, with huge growth potential. As a part of our product offering, Bank Islam will introduce takaful (insurance) services.
“As investors going into Pakistan, Bank Islam and our consortium partners are assured of good returns, even as the Pakistani government introduces several additional investment-friendly policies.
“No doubt, this venture is a big step in forging better business ties among the OIC countries as it involves consortium members from within the group, as well as the establishment of an Islamic bank within a member country,” he said.
As Bank Islam’s principal representative, Noorazman will take on the role of Executive Director at the new Pakistani bank, while Rafique Dawood of Pakistan’s First Dawood Group will be its chairman.
The First Dawood Group will own up to 25 per cent stake in the new bank, coming to the consortium with over 20 years of experience with the stock exchanges and money markets in Pakistan.
The group’s subsidiaries and other diversified business including First Dawood Investment Bank Limited, a leading investment and housing finance services; Guardian Modaraba Management whose core business is in leasing and investment in capital market securities; and Providence Modaraba Limited, the management company of Guardian Modaraba.