Ithmaar Bank buys 136 million shares in Shamil Bank

The shares were purchased today by Ithmaar Bank from Dar Al-Maal Al-Islamic (DMI) Trust, one of the world's largest Islamic financial institutions.

With this purchase, Ithmaar Bank has acquired a 60% shareholding in Shamil Bank.

Both Ithmaar Bank and Shamil Bank, a leading commercial and investment bank based in Bahrain, are public shareholding companies listed on the Bahrain Stock Exchange (BSE).

"Ithmaar Bank purchased the Shamil Bank shares in an arranged trade on the BSE at US$2.93 per share," said an official source at Ithmaar Bank.

Ithmaar Bank had, In June 2006, announced its intention to acquire a 60% shareholding in Shamil Bank from DMI Trust. In a two-way deal, DMI Trust is to acquire from Ithmaar Bank a 100% shareholding in Ithmaar's subsidiary, Islamic Investment Company of the Gulf (IICG) Bahamas.

With the acquisition of Shamil Bank, the activities of Ithmaar Bank will now cover the entire spectrum of Islamic banking and finance services, including commercial banking, private and corporate banking, investment banking, takaful (Islamic insurance), and leasing. Its flagship companies include takaful company, Solidarity, based in Bahrain, Faisal Finance (Switzerland) and Faysal Bank Limited (Pakistan).

"The main objective of the transaction is to create added value for the shareholders of both Ithmaar Bank and Shamil Bank,"

said an official source.

Under the share swap deal, Ithmaar Bank will increase its stake in Faysal Bank Limited (FBL) to 65% (from 28%) and in Faisal Finance to 100% (from 49%). Ithmaar Bank will also acquire Shamil Bank's 25% shareholding in Meezan Bank, an Islamic investment and commercial bank in Pakistan.

FBL is a full service Islamic banking institution offering consumer, corporate and investment banking facilities. The Bank has seen strong growth in the past few years, with after-tax profit growing from US$3.5 million in 2000 to US$52 million in 2005, and deposits exceeding US$2 billion. The Bank currently operates 55 branches throughout Pakistan, with plans to add another 25 branches by the end of 2006.

Meezan Bank is a leading Islamic investment and commercial bank with 31 branches in Pakistan. The Bank posted an after-tax profit of US$7 million in 2005, while total assets exceeded US$50 million.

The acquisition will significantly strengthen Ithmaar Bank and its subsidiaries and affiliates, and better position the Bank to advance its mission of becoming the premier provider and manager of Sharia'a compliant investment products in the Middle East.