Ithmaar goes Islamic

Published: October 27, 2009

Bahraini bank Ithmaar plans a comprehensive reorganisation, taking over its subsidiary, Shamil Bank.

The plans, which will make Ithmaar Bank an Islamic retail bank, involve both institutions pooling their resources to create a single, retail-focused Islamic bank under the Ithmaar brand. Ithmaar will acquire the assets, liabilities and business of Shamil.

The bank hopes the reorganisation will improve liquidity, lower its risk profile and enhance shareholder value.

“The comprehensive Ithmaar-Shamil reorganisation will bring tangible, almost immediate, benefits to all our stakeholders – including our customers, as well as our shareholders and, in broader terms, Bahrain’s banking and finance industry,” says Ithmaar Bank chairman Khalid Abdulla-Janahi.

Following the reorganisation, Ithmaar will undertake retail banking activities locally and regionally while maintaining its investment activities. The bank will apply Accounting and Auditing Organisation for Islamic Financial Institutions standards.

The plans, which were announced by Ithmaar Bank chairman Khalid Abdulla-Janahi following approval of the Ithmaar board of directors and the Central Bank of Bahrain’s “no objection”, are still subject to shareholder and other regulatory approvals.

Since its 100% acquisition in late 2007, Shamil Bank has been operating mainly as the Islamic retail banking arm of Ithmaar.