Bloomberg News covers BankIslami with its news story: BankIslami considers expansion.

KARACHI: BankIslami Pakistan, the country’s first Islamic bank with a focus on wealth management, is in talks with potential partners to fund a 10-fold expansion of its local branch network and tap markets overseas.

“We need an alliance that can give us capital and access to global markets and we’re in discussion with several groups,” Hasan Aziz Bilgrami, chief executive officer, said in an interview at his Karachi head office on May 2. “This won’t be a takeover but an equity injection at a premium by a financial institution in the Middle East, the U.S. or Europe.”

BankIslami joins companies like ABN AMRO Holding, Citigroup and Standard Chartered with its plan to expand Islamic banking to meet demand in the world’s second-most populous Muslim nation. Pakistan’s Islamic finance industry may grow fivefold in the next five years to 15 percent of banking assets, the central bank governor, Shamshad Akhtar, said in January.

The bank will double its capital to 6 billion rupees, or $99 million, by the third quarter this year to finance as many as 100 new branches in 50 cities within the next three years, said Bilgrami. It plans to spend 4 billion rupees on branch expansion in the next two years, he said.BankIslami, Pakistan’s fourth-biggest Islamic bank by assets, raised 400 million rupees in an initial share sale in March; demand for the shares was valued at 3.5 billion rupees.

“Demand for Islamic products in Pakistan will grow because the interest is there and now the branches are there,” said Habib-ur-Rahman, chief executive of Karachi-based Atlas Asset Management. “Islamic banks will have to compete hard on services and product range and they’ll need to market more aggressively.”

BankIslami plans to open 18 new branches in five Pakistani cities this year, expanding from its current 10 branches, nine in Karachi and one in the western city of Quetta.

Wealth management, which will be introduced in early 2008, will accountfor half of the bank’s loans in three years, Bilgrami said. One-fourth will be corporate loans and a quarter will be lending to small and medium enterprises.”No one has focused on Islamic wealth management as the core of their business,” he said. “That’s the gap we’re going to fill.”

The bank plans to open its first overseas branch in Afghanistan in the next three years, because it is a “local and logical choice,” Bilgrami said. It will open at least two more within five years, possibly including an outlet in Sri Lanka

An alliance with an overseas partner will allow BankIslami to access customers in Saudi Arabia, United Arab Emirates, Qatar and Kuwait in the Middle East, Bilgrami said. He also plans to sell Shariah-compliant products in South Africa, Kenya, Zaire, Tanzania, Uganda and Botswana, in addition to Canada.

Pakistan’s Islamic banking industry expanded its assets by 42 percent in the six months that ended March 31, to 134.6 billion rupees, according to central bank data.


BankIslami Pakistan Limited

Leave a Reply

Your email address will not be published. Required fields are marked *

11th Floor, Executive Tower, Dolmen City, Marina Drive, Block-4, Clifton, Karachi.
Serving you, the right ways

All Rights Reserved by BankIslami Pakistan.