Dubai Investments, , a diversified company in which Investment Corporation of Dubai, the emirate’s sovereign wealth fund has an 11.54 per cent stake, has announced plans to lead a consortium of investors to launch Arkan Bank, a wholesale Islamic financial institution with an initial paid-up capital of $100 million, Arabian Business reports. The authorised share capital of Arkan Bank will be $500 million, the investment company said in a statement.
Arkan Bank is applying to the Dubai Financial Services Authority (DFSA) for approval for a prudential Category 5 licence to operate as an Islamic financial institution.This will be the first home-grown Islamic bank to operate from Dubai International Financial Centre (DIFC), the statement added.
“Arkan Bank, which is applying for a license to be based in Dubai International Financial Centre, will have an initial paid-up capital of $100m and authorised share capital of $500m,” Dubai Investments said on Tuesday in a statement to Dubai Financial Market, where its shares are listed.
The bank will offer a fully integrated range of Sharia-compliant banking services and investment products serving the needs of ultra-high-net-worth individuals, corporate as well as institutional clients through its core business lines – Corporate Banking, Asset Management & Awqaf, Investment Banking and Treasury. Arkan Bank will reinforce the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, to position Dubai as the capital of Islamic economy and a centre of Islamic finance.
Arkan Bank also plans to list its shares on Nasdaq Dubai within 12 months of establishment, subject to the fulfilment of listing guidelines and regulatory approvals.Khalid Bin Kalban, managing director and CEO of Dubai Investments, and the founder and chairman of Arkan Bank, said:
“The launch of Arkan Bank is coming at an opportune time in the UAE Islamic banking landscape. Arkan Bank is poised to achieve phenomenal success, as it will be the first wholesale Islamic bank operating in the UAE. The bank will initially focus on the GCC region and subsequently build scale and reach across its business lines, products and geographies to become the top-tier Islamic wholesale bank in the region and global arena. Coupled with strong public markets, sukuk and mergers & acquisition outlook, the future looks optimistic for the bank and aligns with Dubai’s vision to become the capital of Islamic economy.”
Abwab Capital Limited (Abwab) is the investment advisor to Arkan Bank. Abwab is a financial services firm focusing on investments and advisory services in the MENA region and is regulated by the Dubai Financial Services Authority (DFSA). Mohammad Alqahtany, Managing Director and SEO of Abwab Capital, and the Founder and Managing Director of Arkan Bank, said:
“We are grateful to Dubai Investments for its support as a strategic partner in this landmark initiative. Our aim is to be a first-class wholesale bank rooted in Islamic values, and set a new standard in Islamic banking to capitalise on the increasing demand for Sharia-compliant banking services witnessed in the global market. We are committed to providing bespoke financing solutions and products that match our professional clients’ goals and expectations while adhering to the highest governance standards and Sharia principles.”
According to The National, Islamic finance is viewed as a key growth area by financial hubs in the Middle East and Asia. Dubai, the commercial and business hub of the Middle East, is aspiring to become the leader in Islamic economy. Ethical investing has been gaining traction globally. Sukuk issues rose 45 per cent year-on-year to $97.9bn in 2017, the highest level since 2014, boosted by Saudi Arabia’s $9bn inaugural sukuk in April and other GCC sovereign issuances, according to S&P.
Dubai Investments plans to float at least 30 per cent of its district cooling unit Emicool by the end of 2018 on the Dubai Financial Market, Mr bin Kalban told The National last month.
Public offerings are making a comeback following a dry spell over the past couple of years, when a slow down in economic growth forced many companies to shelve plans for IPOs amid concerns of not getting proper valuations for their businesses. The bank will offer banking services and investment products catering to ultra-high-net-worth individuals, corporate and institutional clients through its main business lines: corporate banking, asset management and awqaf, investment banking and treasury.
“Coupled with strong public markets, sukuk and mergers and acquisition outlook, the future looks optimistic for the bank and aligns with Dubai’s vision to become the capital of Islamic economy,” said Mr bin Kalban.
Dubai Investments PJSC is a leading investment company listed on the Dubai Financial Market with over 19,800 shareholders and a paid-up capital of AED 4 billion. Incorporated in 1995, the company has grown exponentially with investments in a number of businesses across three core sectors – real estate, manufacturing & industrial and financial investments across the UAE and the Middle East.
Since inception, Dubai Investments has challenged the norms and introduced cutting-edge technologies, pioneering business models, unique investment strategies and innovative concepts across its diversified portfolio spanning different sectors and markets across the globe. Dubai Investments currently has 39 subsidiaries & joint ventures under its portfolio, across a wide array of industries and continues to seek new investment opportunities in new sectors, locally and internationally, as part of its strategic expansion plans.