UPDATE 1-Qatar Islamic Bank to buy IBQ's Islamic assets

Wed Dec 28, 2011 5:57am EST

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* Sale comes ahead of central bank deadline

* No value given for acquisition (Adds background)

DUBAI Dec 28 (Reuters) - Qatar Islamic Bank will acquire the sharia-compliant corporate portfolio of International Bank of Qatar(IBQ), the Islamic lender said on Wednesday.

The agreement will see IBQ's Islamic corporate financing facilities and its deposit accounts transferred to Qatar's largest sharia-compliant bank by assets, according to a statement.

No value for the acquisition was given.

The move comes ahead of the Dec. 31 deadline, imposed by the Qatar central bank, for conventional banks to stop offering sharia-compliant banking services amid worries of overlaps between the two.

The ban, announced in February, calls for conventional institutions to close their Islamic banking arms - although they could continue to manage existing assets beyond the deadline.

In August, IBQ sold the retail portion of its Islamic banking operations to Barwa Bank, the first such sale of assets by a conventional bank since the edict.

IBQ is 30 percent owned by the National Bank of Kuwait , Kuwait's biggest lender.

QIB's shares closed down 0.1 percent, before the announcement came.

(Reporting by David French; Editing by Rachna Uppal)

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