Consortium buys into Jordan bank, rebrands it
Amman, September 16, 2008
A Jordanian-UAE consortium said it has signed an agreement to acquire 52 per cent of the Industrial Development Bank and rebrand it as Jordan Dubai Islamic Bank (JDIB).
The alliance consists of Dubai International Capital (DIC), Dubai Islamic Bank, and Jordan Dubai Financial (JDF), the investment arm of Jordan Dubai Capital and the largest investor in this deal, which is considered to be its third and biggest investment to date.
The consortium will invest in IDB via its subscription into the bank's capital increase of 26 million shares with a value exceeding JD70 million ($98.8 million), giving the consortium a 52 per cent stake in the bank’s new capital.
A signing ceremony took place at the Four Seasons Hotel in Amman on Tuesday (September 16) announcing the acquisition.
The agreement was signed by Samir Z Al-Rifa’i, CEO of Jordan Dubai Capital (JDC); Khaled Al Kamda, group managing director and CEO of Dubai Islamic Bank (DIB); and Mufleh Akel, chairman of Industrial Development Bank (IDB).
The signing of the agreement was presided over by the Governor of the Central Bank of Jordan, Dr Umayya Toukan.
The consortium will re-launch the Jordanian bank as a world-class Islamic financing institution that offers a full range of Shariah-compliant products for the Jordanian market. The IDB will be re-branded as 'Jordan Dubai Islamic Bank.'
Jordan Dubai Financial was a founder in Amlak Finance (Jordan) along with Amlak Finance (UAE), the Social Security Investment Unit, and other local investors, in order to provide a variety of Sharia-compliant mortgage products in Jordan.
JDF was also a founding member of First Insurance, a recently established company offering Takaful insurance in Jordan.
In addition to owning a share in IDB, the agreement allows Dubai Islamic Bank to provide the technical support and supervision needed to restructure IDB according to international best practices, and to provide IDB access to DIB’s extensive experience in providing Sharia-compliant financing products.
Samir Al-Rifa'i, CEO of JD Capital, said: 'There has been a growing demand in Jordan for Sharia-compliant banking organisations. This trend has become more apparent in recent years, as Islamic banking tools have proved to be more efficient and flexible in meeting a variety of individual as well as corporate client needs.
'We look forward to benefiting from DIB's experience in the Islamic banking sector, as we aspire to become a comprehensive financial institution that provides the best services in the Jordanian market.'
Khaled Al Kamda, group managing director & CEO of DIB, added: “We view this stake acquisition in IDB as a significant milestone for all of us at the bank as it fits in perfectly with DIB’s strategy of growing its network and product reach in markets which have a strong demand for Islamic banking services.
'This agreement with IDB allows us to enter the Islamic banking market in Jordan and extend the same award-winning business model that has seen DIB emerge as the leader in Islamic banking in the UAE. This partnership is also ideal, in that it enables DIB to provide technical support to IDB to develop and offer its unique Sharia-compliant offerings to the Jordanian market, while also introducing state-of-the-art banking systems and international best practices of service to the existing customers of IDB.'
Dubai Islamic Bank has been providing Sharia-compliant banking services since the 1970s, and has investments in many financial sectors across the Islamic world. DIB recently created subsidiaries that practice Sharia-compliant banking in Pakistan and Sudan with great success. This latest venture will add the Jordanian market to the firm’s portfolio.
Mufleh Akel, chairman of IDB, said: 'This partnership between such reputable organisations in the investment world in<