UAE's Ajman Bank revises strategy amid crisis

By Asma Alsharif

DUBAI (Reuters) - New Islamic lender Ajman Bank AJBNK.DU is revising its strategy amid the global economic crisis until the market improves over the next year, its chief executive said on Monday.

The bank, one of eight Islamic lenders in the United Arab Emirates, had originally planned an aggressive rollout in the federation and across the Gulf Arab region.

But it has pulled back from its pan-regional expansion and curbed plans to participate in the local real estate and credit card business as the global financial crisis sweeps across the region.

"Growth and profitability are no longer important objectives for 2009. What is more important is survival and, to some extent, continuity," Yousif Khalaf told the Reuters Islamic Banking and Finance Summit in Dubai.

The United Arab Emirates' construction sector is suffering a sharp slowdown as developers, especially in former boomtown Dubai, halt or postpone projects and thousands of jobs are slashed.

The bank had originally planned to open 15 branches in its first year, but will now open eight in 2009, six next year and another six in 2011.

The lender, which started operations three months ago, has about 1.5 billion dirhams ($408.4 million) in capital after adding 500 million dirhams in deposits since it began operations.

"People want to make sure they survive...and just to continue operations," Khalaf said. "They no longer think they want to improve profitability. They no longer think that they want to grow the business."

The bank would remain conservative in its approach in case there were any further "unforeseen" problems in Western financial markets, said Khalaf, a former chief executive of Bahrain Islamic Bank BISB.BH.

The bank, whose founders include the ruling family of the emirate of Ajman, raised 550 million dirhams in an initial public offering last year to help start its operations.

(For summit blog: summitnotebook.reuters.com/)

($1=3.673 Uae Dirham)

(Editing by Erica Billingham)