Islamic bank heads to PMB

2009-03-17 00:00

Durban-based Albaraka Bank, which this week posted a pleasing 19,5% increase in profits for the 2008 financial year, is set to appoint a local representative to serve the Pietermaritzburg area.

The CEO of the major Islamic bank, Shabir Chohan, told The Witness that the move is the first step in a process that will ultimately lead to a branch being set up in Pietermaritzburg.

“We recognise Pietermaritzburg as being a very important area for us,” said Chohan.

The bank reported profits of R21,7 million and basic and diluted earnings per share increased significantly to 144,9 cents.

“We have expanded our branch network … and taken a proactive approach to arrears management. In this economic climate, we have chosen to visit clients who are in trouble. One has got to be sympathetic to clients … it is a very difficult time.

“However, while we increased our deposit book by R174,7 million, or 12,1%, as was to be expected in terms of the prevailing trading conditions, our gross advances book experienced a relatively slower growth of 6,9%, or R91 million,” Chohan said.

He added that the implementation of a new R15 million computer system will go a long way toward enhancing efficiency and customer service while ensuring that the bank conforms with international standards.

The bank is the South African subsidiary of the giant Bahrain-based Albaraka Banking Group (ABG), which has 285 branches worldwide and declared assets of $11 billion for the 2008 financial year. ABG grew its net income by an impressive 37,1% to $201 million.

ABG aims to increase its stake in Albaraka Bank (South Africa) from 54% to 60%, but the shares are “tightly held” by about 1 200 shareholders.

The bank has paid dividends in recent years and shareholders might be reluctant to sell in the short-term.

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