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Arkan Bank funding led by Dubai Investments as it sets eyes on Nasdaq

Dubai Investments is at the head of a group of investors who will fund and launch a $100 million Islamic bank that will list on Nasdaq Dubai, under the name of Arkan Bank.

The bank is currently applying for a license to be based in Dubai International Financial Centre (DIFC), and will have this $100 million amount as initial paid-up capital, plus an authorised share capital of $500 million. The bank’s shares are currently listed on the Dubai Financial Market.

A year after launch, the lender’s shares will be listed on the Nasdaq, subject to regulatory approvals, and will be the first home-grown Islamic bank in DIFC.

“The launch of Arkan Bank is coming at an opportune time in the UAE Islamic banking landscape,” commented Khalid bin Kalban, chief executive of Dubai Investments, and the founder and chairman of Arkan Bank.

“The bank will initially focus on the GCC region and subsequently build scale and reach across its business lines, products and geographies to become the top-tier Islamic wholesale bank in the region and global arena.”

The bank will offer banking services and investment products catering to ultra-high-net-worth individuals, corporate and institutional clients through its main business lines: corporate banking, asset management and awqaf, investment banking and treasury.

“Coupled with strong public markets, sukuk and mergers and acquisition outlook, the future looks optimistic for the bank and aligns with Dubai’s vision to become the capital of Islamic economy,” said bin Kalban.

Dubai Investments will be making public about 30% of its district cooling unit Emicool’s shares by the end of the year in the Dubai Financial Market, as reported by The National.

It’s worth noting that Investment Corporation of Dubai, the emirate’s sovereign wealth fund, has an 11.54% stake in Dubai Investments.

The future if Islamic services

Islamic finance activities are on the rise across the Middle East and Asia, with Dubai aiming to become the main hub for this types of activities, and it is expected that they will overtake the conventional sector this year.

When it comes to ethical investing, or Islamic investing, sukuk issues rose 45% year-on-year to $97.9 billion in 2017, the highest level since 2014, boosted by Saudi Arabia’s $9 billion inaugural sukuk in April and other GCC sovereign issuances, according to S&P.

Despite these numbers, S&P also reported that global sukuk issuance expected to drop in 2018, due to a series of obstacles that the Islamic finance industry faces, including standardisation and geopolitical tensions in the region.

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