Industrial Development Bank to become Jordan Dubai Islamic Bank

The agreement was signed by His Excellency Mr. Samir Z. Al-Rifa'i, CEO of Jordan Dubai Capital (JDC); Mr. Khaled Al Kamda, Group Managing Director and CEO of Dubai Islamic Bank (DIB); and Mr. Mufleh Akel, Chairman of Industrial Development Bank (IDB). The signing of the agreement was presided over by the Governor of the Central Bank of Jordan, H.E. Dr Umayya Toukan.

The Jordanian-UAE consortium will invest in IDB via its subscription into the bank's capital increase of 26 million shares, giving the consortium a 52% stake in the bank's new capital. The consortium will re-launch the Jordanian bank as a world-class Islamic financing institution that offers a full range of Shariah-compliant products for the Jordanian market. The IDB will be re-branded as "Jordan Dubai Islamic Bank."

The alliance consists of Dubai International Capital (DIC), Dubai Islamic Bank, and Jordan Dubai Financial (JDF), the investment arm of JD Capital and the largest contributor to the investment in this venture, which is considered to be its third and biggest investment to date.

JDF was a founder in Amlak Finance (Jordan) along with Amlak Finance (UAE), the Social Security Investment Unit, and other local investors, in order to provide a variety of Sharia-compliant mortgage products in Jordan.

JDF was also a founding member of First Insurance, a recently established company offering Takaful insurance in Jordan.

In addition to owning a share in IDB, the agreement allows DIB to provide the technical support and supervision needed to restructure IDB according to international best practices, and to provide IDB access to DIB's extensive experience in providing Sharia-compliant financing products.

In this regard, H.E. Mr. Samir Al-Rifa'i, CEO of JD Capital, said:

"There has been a growing demand in Jordan for Sharia-compliant banking organisations. This trend has become more apparent in recent years, as Islamic banking tools have proved to be more efficient and flexible in meeting a variety of individual as well as corporate client needs. We look forward to benefiting from DIB's experience in the Islamic banking sector, as we aspire to become a comprehensive financial institution that provides the best services in the Jordanian market."

Mr. Khaled Al Kamda, Group Managing Director & CEO of DIB, added: "We view this stake acquisition in IDB as a significant milestone for all of us at the bank as it fits in perfectly with DIB's strategy of growing its network and product reach in markets which have a strong demand for Islamic banking services. This agreement with IDB allows us to enter the Islamic banking market in Jordan and extend the same award-winning business model that has seen DIB emerge as the leader in Islamic banking in the UAE. This partnership is also ideal, in that it enables DIB to provide technical support to IDB to develop and offer its unique Sharia-compliant offerings to the Jordanian market, while also introducing state-of-the-art banking systems and international best practices of service to the existing customers of IDB."

Dubai Islamic Bank has been providing Sharia-compliant banking services since the 1970s, and has investments in many financial sectors across the Islamic world.

DIB recently created subsidiaries that practice Sharia-compliant banking in Pakistan and Sudan with great success. This latest venture will add the Jordanian market to the firm's portfolio.

Mr. Mufleh Akel, Chairman of IDB, said: "This partnership between such reputable organisations in the investment world in general and in Islamic investment in particular will introduce new Islamic banking services to the Jordanian market. Islamic banking has been rapidly spreading across the globe, so much so that many foreign countries have taken an interest and have developed laws to accommodate the new trend. The Central Bank of Jordan was a pioneer in this when it dedicated a section of its legislation to Islamic banking in 2000."

HE Dr. Umayya Toukan, Governor of the Central Bank, further added: "This agreement reflects the exceptional relationship between the Hashemite Kingdom of Jordan and the Emirate of Dubai. The conversion of the IDB into an Islamic bank comes in response to the growing demands for Islamic financial services, and is in accordance with the National Agenda which recommended changing specialized lending institutions into banks that offer various banking services and products, also known as Universal Banks. And in that spirit, the Central Bank of Jordan has and continues to exert extensive efforts to unify and modernize Jordanian banks to efficiently serve our national economy."