Press Release – Manama (April 21, 2008)

Annual General Meeting of Albaraka Islamic Bank Elects a New Board of Directors and Mr. Khalid Rashid Al Zayani is Chairman of the Board

Manama, 21.4.2008: Albaraka Islamic Bank B.S.C.(e), Bahrain, one of the banking units of Albaraka Banking Group B.S.C (ABG), held its twenty fourth Ordinary General Meeting recently in Manama, the capital of the Kingdom of Bahrain, whereat the Bank’s shareholders approved the minutes of the twenty third General Meeting held on 9.5.2007. The Meeting then discussed the Directors report about the business activities of the Bank in financial year ended 31 December 2007, report of the Bank’s Sharia Advisor on the financial year ended 31 December 2007 and auditor’s report on the financial year ended 31 December 2007, following which the Meeting approved the final accounts of the Bank for the financial year ended 31 December 2007. A new Board of Directors was then elected for the next three-year term. The new Board of Directors is comprised of Mr. Adnan Ahmed Yousif, Mr. Khalid Rashid Al Zayani, Mr. Yousif Ali Fadhil bin Fadhil, Mr. Maqbool Habib Khalfan, Mr. Adel Saud Dahlawi, Mr. Othman Ahmed Sulaiman, Mr. Ashraf Alghamrawi, Mr. Abdul Latif Janahi, Mr. Mousa Abdul Aziz Shehada and Mr. Mohamed Isa Al Mutaweh.

The Board of Directors held a meeting today at which it elected Mr. Khalid Rashid Al Zayani as Chairman of the Bank’s Board of Directors and Mr. Adnan Ahmed Yousif as Deputy Chairman of the Board of Directors. Mr. Al Zayani is a well-known businessman and banker in Bahrain and the Gulf region. He is the chairman of Al Zayani Investments, which was founded in 1977, and a member of the Board of Directors of Investcorp and Bahrain Credit Company. He also served as member of the Board of Directors of many Islamic banks and financial institutions such as Bahrain Islamic Bank, Bahrain Islamic Investment Company and Takaful International.

In light of the discussions at the meeting, Mr. Khalid Rashid Al Zayani, Chairman of the Board of Directors of Albaraka Islamic Bank said that “Year 2007 was the year of change in the history of Albaraka Islamic Bank following its acquisition of 100% of the shares of the sister company Al Amin Bank (Bahrain), which is wholly owned by the parent company Albaraka Banking Group BSC, to become a major Islamic banking institution that provides a comprehensive range of services with assets exceeding US$1 billion, shareholders equity of US$189.14 million and authorized capital of US$600 million. The Bank now provides commercial and investment banking services and possesses all the factors of success and competitiveness in term of size, efficiency, expertise and range of services offered.

Therefore, although we realise that 2007 and the foreseeable coming period is a transitional period for the full integration of the operations of the two banks as well as a period for reorganizing and restructuring of the new Bank’s departments and marketing, operating, human resources and technical systems, we are looking forward with confidence to the promising future of the Bank, considering that we are now in a position that allows us to move forward with full thrust to achieving our mission and vision and to excel as a regional Islamic bank with a comprehensive range of competitive Sharia-compliant services and products as well as serving our markets and communities in the best possible manner which will eventually achieve greater value for our shareholders, investors and all stakeholders”.

On his part, in commenting on the Bank’s financial results for the year 2007, Mr. Mohamed Al Mutaweh, Chief Executive of Albaraka Islamic Bank said that “Although faced with competitive pressures in both Bahrain and Pakistan, Albaraka Islamic Bank was able to expand its levels of services and portfolios during 2007, which resulted in a remarkable improvement in total income from jointly financed accounts and investments which amounted to $58.65 million, an increase of 29.9% over the previous year”.

Mr. Al Mutaweh added, “The increasing profitability and growing opportunities in its markets prompted Albaraka Islamic Bank to implement an ambitious plan of network expansion, and as a result year 2008 will see a number of new branches opened to provide a platform for consumer services expansion. The bank is also in the process of acquiring new “Equation” core banking software from “Misys” and building its technological deliverability capabilities. It is also on track to meet the Central Bank of Bahrain guidelines and instructions on Basel II implementation by the end of 2008 in addition to a number of other risk management and corporate governance initiatives”.

The Bank’s financial statements showed a modest growth in the Bank’s Murabaha portfolio but this was offset by a big 30% increase in its Ijarah Muntahia Bittamleek portfolio and a rise of 29.6% in its investments portfolio, which in turn contributed to an overall 5.7% growth in total assets to $1.05 billion as at the end of 2007, up from combined total assets for the two merged banks of $991 million in 2006. This growth was funded by current and other deposit accounts which grew by 11.8% to $94 million, together with unrestricted investment accounts which increased by 4.8% to $738 million. On the other hand, shareholders’ equity increased to $189.14 in 2007 (compared to $185.28 million in 2006), which provides the Bank with a strong capital base as reflected by the capital adequacy ratio (in accordance with the instructions of Central Bank of Bahrain in connection with the implementation of Basel II requirements) which reached 30.74% as at the end of 2007 (33.79% as at the end of 2006).

After accounting for the investors’ share of income, which amounted to $17.41 million reflecting an increase of 58.1% over 2006, and adding the revenues from banking services and other operating revenues, the total operating income of the Bank amounted to $28.26 million, compared to $18.62 the previous year, an increase of 51.8%. On the other hand, administrative expenses increased by 20.94% to $21.64 million, reflecting mainly the costs of branch network expansion, and as such net operating income ended at $6.86 million compared with $1.04 million for 2006 and, after setting aside provisions and accrued taxation, the Bank achieved a net profit of $5.29 million as against a loss of $2.77 million in 2006.

The shareholders praised the Bank’s performance in 2007 and the financial results that it achieved especially if the nature of the transitional period that the Bank is going through is taken into account. These results give a clear indication of the promising and great potentials that the Bank has.

Mr. Khalid Rashid Al Zayani, Chairman of the Bank’s Board of Directors and Mr. Mohamed Isa Al Mutaweh, Chief Executive of the Bank, expressed their thanks to the Ministry of Industry and commerce and the Central Bank of Bahrain for the support they extend to the Bank. They also extended their thanks to all the investors, customers and employees of the Bank for their continued loyalty and support, and to the outgoing Chairman of the Bank’s Board of Directors Mr. Mahmood Jameel Hasoubah and to the member of the Board of Directors Mr. Abdul Hameed Mohiyeddin who completed their terms in office, for their great contributions during their term of office. They also expressed their strong confidence in the new Board of Directors in leading the Bank towards achieving its mission and strategic objectives.


Albaraka Islamic Bank was established and licensed to operate from Bahrain on 21st February 1984 under a license issued by the Central Bank of Bahrain. The Bank has an extensive operation in Pakistan through 18 branches located in main cities and centres. The Bank has a capital of US$600 million, whilst shareholders equity amounts to US$189.14 million. The Bank offers commercial and investment banking services.

Albaraka Islamic Bank is one of the Banking Units of Albaraka Banking Group (ABG), which is a Bahrain Joint Stock Company listed on Bahrain and Dubai stock exchanges. It is a leading international Islamic bank with Standard and Poors long and short-term credit ratings of A- and BBB 3- respectively. ABG offers retail, corporate and investment banking and treasury services strictly in accordance with the principles of the Shari'a. The authorized capital of ABG is US$1.5 billion, while the total equity amounts to about US$1.5 billion. The Group has a wide geographical presence in the form of subsidiary banking Units and representative offices in twelve countries, which in turn provide their services through more than 250 branches. These banking Units are Jordan Islamic Bank/Jordan, Albaraka Islamic Bank/Bahrain, Banque Albaraka D'Algerie/Algeria, Albaraka Bank Sudan/Sudan, Albaraka Islamic Bank/Pakistan, Albaraka Bank/South Africa, Albaraka Bank Lebanon/Lebanon ,Bank Et-Tamweel Al- Tunisi Al Saudi/Tunisia, The Egyptian Saudi Finance Bank/Egypt, Albaraka Turk Participation Bank/Turkey, Albaraka Bank Syria (under formation), and a representative office in Indonesia.

For further information, please contact:

Albaraka Banking Group (ABG)
Corporate Communications Department
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Fax: +973-17-536533
Website: www.abg.bh
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