Islamic Development Bank Buys 10pct in First Sri Lankan Commercial Islamic Bank, Amana Bank with Bank Islam Malaysia, AB Bank Bangladesh, Akbar Brs

06th February 2011, arabnews.com, By M D Rasooldeen

The Jeddah-based Islamic Development Bank (IDB) has taken a 10-percent stake in the first commercial Islamic bank in Sri Lanka, which is to be opened shortly in the island, a senior official from the Amana Bank Limited in Colombo told Arab News Saturday.

Amana Bank Limited, which obtained the provisional approval license from the central bank last year to become a bank, has got the green light from the island's Finance Ministry to operate as a commercial bank in the country.

According to the official, the new bank will start operations in the course of this year.

"Amana Bank will be Sri Lanka’s first licensed commercial Islamic bank to conduct all its business operations in complete harmony with the principles of Islamic banking," he said.

Islamic banking is an emerging alternative to the interest-based banking practice and is gaining popularity across the world’s communities.

The bank’s shareholding amounts to 3.4 billion Sri Lankan rupees and constitutes both strategic and retail shareholders with the capital raised by a private placement of shares.

Its key shareholders are Bank Islam, Malaysia Berhad with a 20 percent stake, AB Bank, Bangladesh with 15 percent, Islamic Development Bank, (IDB) Saudi Arabia with 10 percent, and Sri Lankan tea exporter Akbar Brothers with 10 percent.

The bank has engaged KPMG Sri Lanka as its financial advisers to the capital raising.

Amana Bank will acquire the assets and liabilities of Amana Investments through an asset purchase agreement.

With the end of the ethnic conflict in all parts of Sri Lanka analysts predict good business for the newly set up bank.

Incorporated in 1997, Amana Investments Limited (AIL), being the investment and financing arm of the group, offers a range of Shariah-compliant financial solutions to its customers. Since its inception, Amãna has emerged as robust trendsetter in Sri Lanka’s financial services sector and shown remarkable growth in business.

Its entire range of products are interest-free and structured on the principles of Shariah equity and fairness and available to all persons, irrespective of their ethnicity. All products are approved by its Ulema Supervisory Council and subject to regular Shariah audits.

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• Heraymila of Saudi Arabia's Al Mashal Group Invests in Sri Lanka

Heraymila of Saudi Arabia's Al Mashal Group Invests in Sri Lanka

01st November 2010, www.lankabusinessonline.com

The Sri Lanka unit Heraymila Investments, a part of Saudi Arabia's Al Mashal group will use its global links to channel funds from the Middle East and elsewhere with a strong research backed strategy, the head of its local unit said.

"We will be offering opportunities for Sri Lankan companies to raise funds tapping the relationships we have with international funds," Ravi Abeysuriya, group chief executive of Heraymila's Sri Lankan operations said.

"Our main strength will be our placement capabilities."

Heraymila bought into a licensed stock brokerage, formerly controlled by Amana, a Colombo-based Islamic finance group.

But Heraymila is also setting up divisions to handle investment banking and fund management.

Heraymila has been investing in Sri Lanka's equity market from 2005, and bought strategic stakes in several firms, including a 10 percent stake in Commercial Bank at one time.

"When peace came they were keen to play a more active part in the market, because they felt there were a lot of opportunities to attract foreign funds, including their own money," Abeysuriya said.

In addition to around 260 million dollars it is directly managing, Abeysuriya says the group co-invests around the globe with international finance houses such as JP Morgan and Goldman Sachs.

One of its strengths will be a strong research capacity. Abeysuriya himself at one time headed the Sri Lanka unit of Amba Research, a capital markets research outsourcing firm catering to US and European markets.

"The core of our value proposition is fundamental research, where we will be publishing quarterly research on the macro-economic situation, sectoral analysis and selected coverage of individual companies," he said.

Heraymila will also get into fund management. Abeysuriya says the group will structure funds that will meet the appetite for mutual funds abroad.