DUBAI (Reuters) - Dubai’s Noor Islamic Bank could spend as much as $2 billion on a single acquisition if it can find the right opportunity as it seeks to expand abroad, the bank’s chief executive Hussain al-Qemzi said.
Only a month ago, Qemzi said the bank would spend as much as $1 billion on an individual purchase if necessary.
“We are highly capitalized,” he told the Reuters Islamic Finance Summit on Tuesday, adding that there were various ways in which Noor Islamic Bank could finance its growth plans.
Qemzi reiterated his desire to enter the UK market, which he sees as essential in Noor Islamic Bank’s drive to create the world’s largest Islamic bank, but acquisition targets were few and far between, and prices were high.
If Noor Islamic Bank is unable to buy into the UK, it will seek a banking license and build a presence there, Qemzi said.
Noor Islamic Bank has embarked on an international advertising campaign to raise its global profile in banking.
“We wanted to be known to other financial institutions,” he said, adding that this drive would continue.
The bank, which is 25 percent owned by the government of Dubai and 25 percent by the emirate’s ruler, formally started operating last month and now has more than 400 staff.
Wage costs had risen sharply since the project to develop a global Islamic bank was begun, but the biggest challenge facing it was a lack of technical skills in areas such as risk management and specialist credit.
But the bank’s Islamic focus had attracted Muslims who found its business model more acceptable than others, Qemzi added.
Qemzi expects Noor Islamic Bank to reach breakeven at the operating level by 2009, but reiterated that an initial public offering was not on the cards until the bank had shown three consecutive years of profit.
Editing by Will Waterman