Dubai Bank eyes global status, sets up $5 billion MTN

Dubai Bank plans to become a major global Islamic lender over the next five years through acquisitions and has set up a $5 billion financing programme to aid expansion, its chief financial officer said on Sunday.
The bank, a unit of Dubai Banking Group, has "pretty much the same aspirations" as group affiliate Noor Islamic Bank, which is aiming to be the world's largest Islamic bank within five years, Ahmed El Shall told Reuters in an interview.
"We have a specific strategy to be by 2011 a major force to contend with in the Islamic bank arena," he said. "(Within five years) I can see Dubai Bank almost on a global basis and represented in Europe, very much in Asia and Africa and at regional level in other GCC countries."
Dubai Banking Group, a unit of Dubai Holding which is owned by the ruler of Dubai, has a 40 percent stake in Bank Islam, Malaysia's oldest and largest Islamic bank, and a 40 percent stake in ACR Re-Takaful Holdings Ltd, the world's largest reinsurance company.
The group is looking to continue its expansion into Asia and Africa and would use the Dubai Bank brand to enter the banking sector in those markets, Shall said.
"It will be a combination of organic and acquisition (based) growth ... There are negotiations for joint ventures with certain countries whereby the target is to make sure we have control of an existing business," he added, declining to be more specific.
Dubai's government, ruler Sheikh Mohammed bin Rashid al-Maktoum and 15 other individuals put 3.16 billion dirhams ($860.6 million) into Noor Islamic Bank in 2007 and the bank has set a five-year target to become the largest Islamic lender. Shall, whose bank has a capital of 2.2 billion dirhams including reserves, said there was room for two large Islamic institutions within the same company, although acknowledged that in the long term it may make sense to merge the two.
"Looking at the future, it would not be out of the question if you see that one of the entities acquires the other one," Shall said, adding that there were no such plans at the moment.
The bank, with assets of about 16 billion dirhams, has also set up a $5 billion medium-term note programme to help finance the proposed expansion, although the bank is waiting for the "opportune" moment before tapping the debt markets. "All options are on the table ... we're looking at the sukuk (Islamic bonds) market and syndicated loans," Shall said, declining to identify the banks mandated to arrange the programme.