Unicorn ups stake in Dawood Islamic Bank

The Unicorn Investment Bank, Bahrain has increased its stake in Dawood Islamic Bank Limited (DIBL) with an investment of 13 million dollars. The Unicorn Investment Bank has acquired some 15 percent share more at the time when the global economies including Pakistan are facing worst challenges and confidence on financial institutions is at its lowest level.
The deal has been finalised and DIBL has received 12.9 million dollars from Unicorn Investment Bank Limited for further share holding of the bank. With the current investment and 15 percent acquisition, overall share of Unicorn Investment Bank has reached 37 percent from 22.2 percent and Unicorn has become largest stakeholder in the DIBL.
Regulatory framework has also been completed and DIBL has informed the central bank about the changing in the equity holding. DIBL launched its operation in 2007 with an initial paid-up capital of Rs 3 billion and being operated in compliance with the principles of Shariah and all its products are subject to the approval of its Shariah board headed by renowned Islamic scholar Professor Mufti Muneeb ur Rehman.
"We have seen positive growth in the Islamic banking in Pakistan despite several challenges and financial crunch, therefore we have decided to increase our shareholding in DIBL," said Aamir Khan, Managing Director and Head Global Private Equity of Unicorn Investment Bank and a founder Director of Dawood Islamic Bank.
He said that the decision to invest in DIBL is based on excellent opportunities that are available in the Islamic banking sector of Pakistan. While, the stake in Dawood Islamic Bank provides Unicorn with access to the Pakistan market with its 160 million population, 97 percent of whom are Muslims, he added. "We will focus agricultural, alternative energy and dairy projects in the private sector for financing, which would also help provide new job opportunities," he added.
He said that Unicorn already had a 22.2 percent equity stake in DIBL prior to the current investment and with the new investment the equity of Unicorn Investment Bank, in Dawood Islamic Bank has increased to 37 percent. "The investment by Unicorn Investment Bank would further boost the ability of Dawood Islamic Bank to provide support to trade and industry through its various Riba-free banking products," said Rafique Dawood, Chairman of Dawood Islamic Bank.
He said that the interest of Unicorn in DIBL reflects the strength of the Islamic banking system of Pakistan which withstood the current turmoil in the global financial markets proving to the world that Shariah compliant financing is more transparent and trustworthy. "Deposits of Islamic banking system represented 4 percent share in total deposits in Pakistan in 2008, however it is projected to reach 10 percent amounting some 13 billion dollars by the end of 2014," he added.
He said that Bank is focusing on the growing segment of importers and exporters that are reluctant to utilise bank financing with the fear of breaching Islamic laws as defined in the Quran and Sunnah. Recently the bank enhanced its paid-up capital to Rs 5 billion fulfilling the central bank condition. While the bank has a network of 21 branches spread over the major cities including Karachi, Lahore, Islamabad, Faisalabad, Multan, Sialkot, Iqbalabad and Joharabad.