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Ithmaar Bank is pushing ahead with plans for a comprehensive reorganisation with its wholly-owned subsidiary, Shamil Bank, after a majority of shareholders voted in favour of the proposal.
The plans, which will turn Ithmaar Bank into a premier Islamic retail bank, involve both banks pooling their resources together to create a single, more efficient and significantly stronger retail-focused bank with an Islamic license, under the Ithmaar brand.
The plans, which already have the Central Bank of Bahrain's approval, were presented by the Ithmaar board of directors to the bank's shareholders at an extra-ordinary general meeting (EGM) that was held at the Regency Intercontinental Hotel, Bahrain. The Shamil Bank EGM has already approved the reorganisation.
Ithmaar Bank shareholders approved to increase the authorised capital to $2 billion and also approved three capital raising initiatives that will, together, add up to $500 million to the bank's capital, thereby increasing shareholder equity to about $1.4 billion.
"The shareholder's overwhelming support for the board's proposals has ushered in a new era for the Bank," said Ithmaar Bank chairman Khalid Abdulla-Janahi. "Our focus is now on ensuring that the reorganisation and capital raising plans are completed in the shortest time possible," he said.
"When the reorganisation and capital raising initiatives are completed, Ithmaar Bank will have been transformed into one of the region's largest, most efficient retail-focused Islamic banks - and, with the additional capital, we will in a better than ever position to capitalise on the unique opportunities that are being created by the challenging financial climate," he said.
"At the onset of the financial crisis, we had stressed that our strategy, moving forward, would focus on protecting our capital base and on insulating our shareholders from the global financial crisis," said Ithmaar Bank chief executive officer, Mohamed Hussain. "This was our clear message to shareholders at the last general meeting in March and, although we've managed to successfully deliver on our promises, we are continuing to further reinforce our position to protect against the challenging financial climate," he said.
"To further bolster our position, we also announced three capital raising initiatives which include a five-year Mandatory Convertible Sukuk that will be the first of its kind issued by a financial institution in the region," said Mr Hussain.
"These plans will substantially increase our regulatory capital and, in doing so, will give us the opportunity to capitalise on the many, very promising opportunities that are now being created," he said.
