EGM of Al Baraka Islamic Bank Increase the Authorized Capital from US$200 to US$ 600mm And Approve the Merger with Al Amin Bank



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Office of the President and Chief Executive, 21 May 2007

EGM of Al Baraka Islamic Bank Increase the Authorized Capital from US$200 to US$ 600mm And Approve the Merger with Al Amin Bank

The Extraordinary General Meeting of Al Baraka Islamic Bank (E.C), a subsidiary of ABG (B.S.C), approved increasing the authorized capital of the Bank to US$600 million, divided into 6mm shares of US Dollars one hundred each.

In its meeting held today, the Extraordinary General Meeting of the Bank approved also the resolution of the Board of Directors to merge with Al Amin Bank (E.C) a subsidiary of ABG, with Al Baraka Islamic Bank and the acquisition of the assets and liabilities of Al Amin Bank in accordance with the clauses of the draft purchase agreement presented before the Meeting

AlBaraka Islamic Bank was established and licensed on 21 February 1984 to operate from Bahrain as an Offshore Banking Unit (OBU) in accordance with a licence issued by Bahrain Monetary Agency. The bank has a paid up capital of US$50 million, divided into half a million shares of US$100 each.

As for AlAmin Bank, it was established in 1987 under the name "Al Amin Company for Securities and Investment Funds (E.C)". The Company began to operate as an Islamic investment bank since May 2001 after obtaining a bank licence from the Central Bank of Bahrain

The merger of the two banks is hoped to result in the creation of an Islamic banking institution that combines commercial banking services, which are now being offered to individuals and corporate clients by Al Baraka Islamic Bank, with the investment banking services of Al Amin Bank. Because the two banks have more than two decades of experience in banking, offer a wide range of products and services and occupy leading positions in the market, the merger will, no doubt, result in the emergence of a new robust institution that possesses all the elements of success and competitiveness in terms of size, efficiency, expertise or services offered.

A preliminary study reveals that the merger will result in the creation of a major Islamic banking institution with assets of more than US$925 million and equity of about US$185 million. This in turn will put it in the top of the list of Islamic banking institutions operating in the Kingdom of Bahrain. The newly formed institution intends to offer some of its shares for public subscription and list them on Bahrain Stock Exchange, considering that Al Baraka Islamic Bank is a commercial Islamic bank that offers all commercial banking services to the public in Bahrain.

On this occasion, Chairman of Al Baraka Banking Group Sheikh Saleh Kamel said that the merger of these two well established banks, which are subsidiaries of Al Baraka Banking Group, was a realization of an old dream. Sheikh Kamel is a strong believer in mergers among Islamic banking institutions, because merger consolidates their potential for development and improves their competitiveness

On his part, Mr. Mahmood Jameel Hassouba, Chairman of the Board of Directors of Al Baraka Islamic Bank and Al Amin Bank said that Al Baraka Bank was considered a pioneer in Bahrain and its operations and activities covered Saudi Arabia, the UAE and other Gulf countries, in addition to Pakistan. The Bank has a large base of clients who wanted to conduct their investment and financial dealings in accordance with the principles of Islamic Shari'a. Al Amin Bank has in the recent years implemented many strategic initiatives that contributed effectively to consolidating the notable position it occupies at present. One such initiative pertains to making maximum use of available financial resources, while the volume of the participation in its "Issues", its unique product, has risen to US$4.0 billion, in addition to the quality assets, especially issued Islamic Sukooks held by the Bank.

On his part, Mr Salah Ahmed Zain Alabdin. General Manager of Albaraka Islamic Bank, expressed his pleasure with this great achievement. Mr. Salah confirmed that this transaction will further enhance the leading role of the bank in the local and regional markets. He added that they will maximize their efforts to achieve the objectives of the new entity an to contribute in the social and economic development in Bahrain.

Mr. Mohamed Al Mutawah, General Manager & Board Member of Al Amin Bank, stressed that the points of strength of Al Amin Bank are not limited to its ability to offer short term investment services, but also extends to its ability to access new markets and reach new customers. This resulted in the diversification of its sources of finance, opening of new short and medium term credit lines and enabled the bank to enter into bilateral agreements with more Islamic banks across the Middle East and North Africa.

Finally, Mr. Adnan Ahmed Yousif, Chief Executive Officer of ABG, described the merger between the two subsidiary banking units of the ABG as an important step within the Group's strategic plan for the restructuring and unification of all the activities and operations of its ten banks. This in turns is part of the Group's unified business strategies that are based on making the best use of the unique points of strength of every Unit in its market and line of business, and at the same time embedding these points of strength into a comprehensive basket of products and services that every Unit in the Group would be able offer to its clients in its own market in cooperation and coordination with the other Units of ABG. Mr. Adnan Yousif added that the merger between the two banks, since both of them operate in Bahrain, will reduce operational costs and provide them with a competitive edge, because the new institution will be able to provide both commercial and investment banking services.
Albaraka Banking Group’s (ABG), which is a leading international Islamic bank. 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 and shareholders' equity was about US$1 billion as at the end of 2006. The Group has a wide geographical presence in the form of subsidiary Banking Units in ten countries, which in turn conduct business through more than 215 branches. These Banking Units are Banque Al Baraka D'Algerie, Al Amin Bank, Bahrain, Al Baraka Islamic Bank, Bahrain, the Egyptian Saudi Finance Bank, Egypt, Jordan Islamic Bank, Jordan, Al Baraka Bank Lebanon, Lebanon, Al Baraka Bank Ltd, South Africa, Al Baraka Bank Sudan, Sudan, Bank Et-tamweel Al Saudi Al Tunisi, Tunisia, Al Baraka Turk Participation Bank, Turkey and Al Baraka Bank, Pakistan.