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Islamic banking: Al Baraka expands in hard times

Dominic O’Neill
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Credit-quality and profit-growth troubles; Subsidiary in Syria to undertake IPO

Al Baraka Banking Group already has a network across 12 markets in the Middle East, Africa and Asia, but this pioneer of Islamic mass-market banking is accelerating its expansion at a difficult time.

In October, for example, the bank’s new Syrian subsidiary hopes to raise $35 million on the Damascus stock market and bring its total capital to $100 million. Bemo Saudi Fransi is arranging the issue. By early next year, the Syrian network will start operations, almost completing Al Baraka’s jigsaw in the eastern Mediterranean.

Adnan Yousif, chief executive of the Bahrain-based institution, tells Euromoney he expects to start negotiations by the end of 2009 on an acquisition in Indonesia, where there are a couple of banks he is considering as targets. He says the bank is also thinking of introducing retail banking operations in China, India and France – countries whose large Muslim populations...