Saudi Islamic Development Bank buys 10% stake in Amana

Monday, 7 February 2011 00:45 - - {{hitsCtrl.values.hits}}

RIYADH: The Jeddah-based Islamic Development Bank (IDB) has taken a 10-percent stake in the first commercial Islamic bank in Sri Lanka, which is to be opened shortly in the island, a senior official from the Amana Bank Limited in Colombo told Arab News Saturday.

Amana Bank Limited, which obtained the provisional approval licence from the Central Bank last year to become a bank, has got the green light from the island’s Finance Ministry to operate as a commercial bank in the country.

According to the official, the new bank will start operations in the course of this year.

“Amana Bank will be Sri Lanka’s first licensed commercial Islamic bank to conduct all its business operations in complete harmony with the principles of Islamic banking,” he said.

Islamic banking is an emerging alternative to the interest-based banking practice and is gaining popularity across the world’s communities.

The bank’s shareholding amounts to 3.4 billion Sri Lankan rupees and constitutes both strategic and retail shareholders with the capital raised by a private placement of shares.

Its key shareholders are Bank Islam, Malaysia Berhad with a 20 percent stake, AB Bank, Bangladesh with 15 percent, Islamic Development Bank, (IDB) Saudi Arabia with 10 percent, and Sri Lankan tea exporter Akbar Brothers with 10 percent.

The bank has engaged KPMG Sri Lanka as its financial advisers to the capital raising.

Amana Bank will acquire the assets and liabilities of Amana Investments through an asset purchase agreement.

With the end of the ethnic conflict in all parts of Sri Lanka analysts predict good business for the newly set up bank.

Incorporated in 1997, Amana Investments Limited (AIL), being the investment and financing arm of the group, offers a range of Shariah-compliant financial solutions to its customers. Since its inception, Amãna has emerged as robust trendsetter in Sri Lanka’s financial services sector and shown remarkable growth in business.

Its entire range of products are interest-free and structured on the principles of Shariah equity and fairness and available to all persons, irrespective of their ethnicity. All products are approved by its Ulema Supervisory Council and subject to regular Shariah audits. Source - arabnews.com