Saudi Investment to take Albaraka stake
Manama, July 19, 2007
Saudi Investment Bank said it had agreed to take a stake in Albaraka Banking Group, Bahrain's third-largest lender by market value, swapping shares with one of its owners.
Saudi-based Dallah Albaraka Group will take shares in Saudi Investment Bank in return for half of Dallah's stock in Albaraka Banking, Saudi Investment said in a statement.
Dallah owns 45 percent of Albaraka Banking, which is worth $1.86 billion at Tuesday's closing share price. The transaction is worth about $418 million, according to Reuters calculations.
'This transaction is an important step towards achieving geographic, regional, Arab and Islamic expansion and integration,' said Saudi Investment Bank, the kingdom's third-worst performing stock in 2007.
Albaraka Banking, which complies with Islamic principles such as banning the receipt of interest, has 230 branches in 10 countries, including Turkey, Pakistan and South Africa, according to its Web site.
It also has licences to open branches in Syria and Indonesia, the world's most populous Muslim nation. Shares of Albaraka Banking Group have risen 5.7 percent this year.
'Dallah Albaraka Group will take shares in Saudi Investment Bank for the price that the two parties will agree upon after the end of necessary procedures,' Saudi Investment said.
Last week, Albaraka Banking chief executive Adnan Yousif told Reuters he planned to open about 74 branches during the next five years, all but two of them outside Bahrain.
The agreement with Dallah 'provides a competitive advantage to Saudi Investment Bank since it will achieve diversified sources of income and banking services to cater for the rapidly growing needs in the banking sector,' Saudi Investment said. - Reuters