To create a single retail-focused Islamic bank under the Ithmaar brand
Ithmaar Bank, a Bahrain-based bank, plans to reorganise its wholly owned subsidiary, Shamil Bank. This plans involve both banks pooling their resources to create a single retail-focused Islamic bank, under the Ithmaar brand. This business model adopted by the bank is part of its new strategy.
Reportedly, the reorganisation plans are expected to further improve liquidity, lower the risk profile and improve shareholder value by amplifying existing synergies and put the bank in a position to capitalise on the exciting business opportunities that are now being created.
Ithmaar Bank has said that the reorganisation will, in effect, turn it into an Islamic bank with a retail license. The assets, liabilities and business of Shamil will be acquired by Ithmaar. Following the reorganisation, Ithmaar will undertake retail banking activities locally and regionally while maintaining its investment activities. Moreover, the bank will apply Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) standards. However, the announced plans for reorganisation are subject to shareholder and other regulatory approvals.
Khalid Abdulla-Janahi, chairman of Ithmaar Bank, said: “The comprehensive Ithmaar-Shamil reorganisation will streamline our group structure and work process, dramatically improving our efficiency. It will also further enhance our liquidity and bolster our regulatory capital while facilitating higher standards of corporate governance. This 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.”
Mohamed Hussain, CEO and member of the board of Ithmaar, said: “Shamil Bank will see its brand replaced by Ithmaar Bank, which will emerge as a much larger, stronger, full-service Islamic bank that will be better equipped than ever before to take advantage of new and exciting business opportunities in the Islamic banking and financial services sector. Although the Shamil Bank brand will cease to exist, this reorganization will be seamless and there will be no change, whatsoever, in customer, depositor or investor accounts or relationships. Instead, Ithmaar Bank will continue to offer the same products and services and new products and services.”