DIB set to buy majority stake in Jordan bank

MAJORITY STAKE: Dubai Islamic Bank plans to move in on the Industrial Development Bank of Jordan. (Getty Images)

Dubai Islamic Bank (DIB) said on Tuesday it would buy a majority stake in Industrial Development Bank of Jordan with a view to converting it into an Islamic-compliant institution.

The acquisition will take place through a joint venture with Dubai International Capital (DIC), a $13 billion investment agency owned by the ruler of Dubai, and Jordan Dubai Capital, the bank said in a statement.

It did not give the value of the planned deal.

Shares in the Jordanian bank, which has a market capitalisation of around $145 million, have risen 36 percent so far this year. It is one of the smallest listed banks on the Amman Stock Exchange, according to Reuters data.

"As the world's first Islamic bank ... we are very keen to expand our business methods to countries throughout the Arab and Muslim world," Khaled al-Kamda, group managing director and CEO of DIB, said in a statement.

The bank would be rebranded as Jordan Dubai Islamic Bank if the deal is finalised, the statement said.

DIC, which manages a $500 million fund investing in Jordan, said in April it planned to set up a sharia-compliant lender in the country in conjunction with DIB, which is the UAE's largest Islamic bank.

DIC has already joined up with Dubai-based mortgage lender Amlak Finance to set up an Islamic mortgage firm in Jordan to tap into opportunities in a country where the mortgage industry is in its infancy.

DIB has created Islamic-compliant subsidiaries in Pakistan and Sudan, the statement said.

Islamic banks cater to investors who want to avoid earning or paying interest, viewed as usury under Islamic law. (Reuters)

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