Ithmaar Bank, a prominent Islamic investment bank based in Bahrain, announced today that it has purchased 136.97 million shares in sister company, Shamil Bank, in a US$410 million transaction.
The shares were purchased today by Ithmaar Bank from Dar Al-Maal Al-Islamic (DMI) Trust, one of the world’s largest Islamic financial institutions.
With this purchase, Ithmaar Bank has acquired a 60% shareholding in Shamil Bank.
Both Ithmaar Bank and Shamil Bank, a leading commercial and investment bank based in Bahrain, are public shareholding companies listed on the Bahrain Stock Exchange (BSE).
“Ithmaar Bank purchased the Shamil Bank shares in an arranged trade on the BSE at US$2.93 per share,” said an official source at Ithmaar Bank.
Ithmaar Bank had, In June 2006, announced its intention to acquire a 60% shareholding in Shamil Bank from DMI Trust. In a two-way deal, DMI Trust is to acquire from Ithmaar Bank a 100% shareholding in Ithmaar’s subsidiary, Islamic Investment Company of the Gulf (IICG) Bahamas.
With the acquisition of Shamil Bank, the activities of Ithmaar Bank will now cover the entire spectrum of Islamic banking and finance services, including commercial banking, private and corporate banking, investment banking, takaful (Islamic insurance), and leasing. Its flagship companies include takaful company, Solidarity, based in Bahrain, Faisal Finance (Switzerland) and Faysal Bank Limited (Pakistan).
“The main objective of the transaction is to create added value for the shareholders of both Ithmaar Bank and Shamil Bank,” said an official source.
Under the share swap deal, Ithmaar Bank will increase its stake in Faysal Bank Limited (FBL) to 65% (from 28%) and in Faisal Finance to 100% (from 49%). Ithmaar Bank will also acquire Shamil Bank’s 25% shareholding in Meezan Bank, an Islamic investment and commercial bank in Pakistan.
FBL is a full service Islamic banking institution offering consumer, corporate and investment banking facilities. The Bank has seen strong growth in the past few years, with after-tax profit growing from US$3.5 million in 2000 to US$52 million in 2005, and deposits exceeding US$2 billion. The Bank currently operates 55 branches throughout Pakistan, with plans to add another 25 branches by the end of 2006.
Meezan Bank is a leading Islamic investment and commercial bank with 31 branches in Pakistan. The Bank posted an after-tax profit of US$7 million in 2005, while total assets exceeded US$50 million.
The acquisition will significantly strengthen Ithmaar Bank and its subsidiaries and affiliates, and better position the Bank to advance its mission of becoming the premier provider and manager of Sharia’a compliant investment products in the Middle East.
About Ithmaar Bank
Ithmaar Bank B.S.C. was incorporated in Bahrain in 1984 as Faysal Investment Bank of Bahrain, a wholly owned subsidiary of Shamil Bank of Bahrain. The Bank’s name was changed to Ithmaar Bank in 2003, following the sale of Shamil Bank’s shareholding to Dar Al-Maal Al-Islami Trust (DMI).
Ithmaar Bank, which has a paid-up capital of US$360 million, is a full service Islamic investment bank with operations spanning the Middle East and North Africa (MENA) region, as well as Asia and Europe. Besides holding significant investments in the banking and financial services sector in different markets, the main activities of the Bank include underwriting business (equity and debt), private equity (structuring, participation and portfolio management), project financing, and advisory business (capital market, mergers & acquisitions and project advisory).
Ithmaar Bank’s flagship companies include Solidarity, an Islamic insurance company based in Bahrain; Faisal Finance (Switzerland) and Faysal Bank Limited (Pakistan).
The Bank’s shares are listed on the Bahrain Stock Exchange. For more information on Ithmaar Bank, please visit the Bank’s website on www.ithmaarbank.com
About Shamil Bank
Shamil Bank is incorporated in the Kingdom of Bahrain and has grown steadily since 1982 to become a leading Islamic fainacial institution with a shareholding equity of US$331 million as at 30 June 2006.
The Bank provides a diverse range of products and services that cater to the financing and investment needs of individuals and instuitutions. It conducts its business in compliance with the principles of the Islamic Sharia’a.
The Bank operates a network of local branches and maintains a presence in overseas markets through subsidiary, associated and affiliated companies. The Bank’s shares are listed on the Bahrain Stock Exchange.
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