Bahrain’s third largest Islamic bank Al Baraka Banking Group says it is mulling over expanding operations into Kenya as it seeks to claim a piece of the fast-growing Shariah-compliant banking market in the region.
The lender will be following in the footsteps of fellow Middle Eastern banker, Dubai Islamic Bank.
The group will likely offer shares in 2019 to fund its global expansion plans, chief executive Adnan Yousuf told Al Arabiya TV in an interview last Sunday.
The Manama-based bank also plans to expand into other East Africa countries including Tanzania and Uganda as well as venture into China and Indonesia, Mr Yousuf said.
Al Baraka last year issued $400 million (about Sh40 billion) a tier one sukuk, or Islamic bond, which would cover some of the costs of its expansion, Mr Yousuf added.
“The remaining portion will come through a share offering, which we expect in 2019 or the end of 2019,” he said.
Kenya has three fully-fledged Islamic banks, while five other conventional lenders have been offering Shariah-compliant services and products through “Islamic Windows”.
Gulf’s Dubai Islamic Bank recently entered the market taking the competition to First Community Bank and Gulf African Bank, the locally owned Islamic lenders that had faced little competition in the segment for a decade.
Foreign banks are understood to be keen to cash in on the efforts by authorities to make Kenya a hub for Islamic finance in Africa with ongoing reforms expected to drive the growth of Islamic-finance operations.
Kenya recently unveiled a package of initiatives aimed at developing a policy framework for Islamic finance in the country.
Jeddah-based Saudi business tycoon Saleh Kamel owns nearly 75 per cent of Al Barak.