Baku, Azerbaijan, Feb. 10
By Emin Aliyev - Trend:
The International Bank of Azerbaijan (IBA) is planning to double its Islamic financing operations and increase Islamic banking assets to $400 million by late 2014, the IBA Islamic Banking Department's Head, Behnam Gurbanzade said in an interview with Azernews newspaper.
"Furthermore, we are holding negotiations with a number of banks from the Middle East and North Africa (MENA) with the purpose of attracting financial sources as well as Wakala deposits meeting Islamic financing requirements," he stressed.
Wakala is an agency agreement under which the investor authorises the agent (bank) to invest funds in assets permitted by Sharia.
The department's head also said the IBA signed a Syndicated Murabaha Financing Facility by Barwa Bank, Emirates NBD Capital Limited (EMCAP), J.P. Morgan Limited (J.P.Morgan) and Noor Islamic Bank PJSC (Noor), together the 'Initial Mandated Lead Arrangers' and 'Bookrunners'.
"Launched at $100 million, the facility was oversubscribed to close at $120.5 million with participation from 10 banks. The facility was a debut Sharia compliant facility for the IBA," he said. "Taking this opportunity, I would like to express my congratulations to the entire IBA team for being awarded the best Cross Border Islamic Deal of 2013 by Islamic Financial News (IFN)".
IBA started rendering Islamic banking services in 2003, becoming the first in Azerbaijan's banking market. The bank has been providing services in this area with resources attracted from the Islamic Development Bank Group.
Last year a consortium of Salans, KPMG, Pinsent Masons and Dar al Shariah companies was assisting IBA in the creation of a specialised structure to render products and services of Islamic banking.
The IBA was founded in January 1992 as the successor of the Vnesheconombank's Azerbaijani branch. The bank holds a leading position in the country's banking sector. The main shareholder is the Azerbaijani government which owns a 50.2 percent share. The remaining shares of the bank are owned by private individuals and legal entities.
Translated by E.A.
Edited by S.M.