Albaraka Banking Group (ABG) has joined the swelling number of businesses operating in Saudi Arabia and the Gulf that are planning to convert to a public joint stock company. According to ABG Chairman Saleh Kamel, the shareholders approved the conversion at an extraordinary general meeting recently.

ABG Chief Executive Officer Adnan A. Yousif says that the initial public offering (IPO) is scheduled for the first quarter of 2006, when ABG’s shares will be listed on the Bahrain Stock Exchange; ABG is currently a Bahrain-registered private shareholder company. The extraordinary general meeting approved the necessary amendments to ABG’s memorandum and articles of association. It also approved the proposed listing of the bank’s shares on regional and international stock exchanges.

The move to go for an IPO was taken by the founder shareholders in order to diversify the shareholding base and enable wider participation by regional and international investors. It should also earn them handsome rewards. In addition, the IPO will help the bank expand its existing operations as well as explore new markets, enabling it to grow regionally and internationally. Its goal is to become the largest Islamic bank in the world.

“With a solid capital and asset base, the bank will be strategically positioned to compete effectively with major conventional and Islamic banks operating in the region and other parts of the world,” adds Yousif.

Gulf International Bank (GIB) has been mandated to act as financial adviser for the IPO. GIB was selected following proposals received from a number of reputable investment banks and institutions — the selection was based on GIB’s knowledge of the regional capital markets and its track record in executing large transactions.

ABG was established in Bahrain in June 2002 and operates under an offshore banking license. It has 10 subsidiaries incorporated in Algeria, Bahrain, Egypt, Jordan, Lebanon, South Africa, Sudan, Tunisia and Turkey; it has 184 branches worldwide. Saleh Kamel owns 55 percent of the shares with the remaining 45 percent being held by Dallah Al Baraka Holding Company.