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Jeddah-based IDB to sell off two-thirds of its Islami Bank shares

  • Published at 08:18 pm May 23rd, 2017
  • Last updated at 08:19 pm May 23rd, 2017
Jeddah-based IDB to sell off two-thirds of its Islami Bank shares
The Islamic Development Bank is selling off two-thirds of its shares in Islami Bank Bangladesh Limited (IBBL) as part of its tenure strategy to drive maturing institutions. The Saudi-based lender is bringing down its share to 2.1% in IBBL from the existing 7.5%, IDB correspondence Dr Arif Suleman said on Tuesday. “There has been a misconception that the Islamic Development Bank is leaving Islami Bank. We are not leaving, we are just reducing our shareholdings,” clarified Suleman in response to queries from journalists on the sideline of the 34th Annual General Meeting of IBBL in Dhaka. “The role of IDB in all our member countries, not only in Bangladesh, is development. In terms of IBBL, the focus has been on developing the Islamic financial services sector in Bangladesh and also help in the development of the country itself… we have served our purpose as an institution in IBBL. But we are not leaving,” he said. Currently, the Islami Bank contributes over 25% in small and medium-sized enterprise (SME) development in the country and its making a positive impact. Globally it is recognised as a highly reputable institution. Despite reduction of shareholding, IDB will remain on board and will be active in IBBL, the IDB correspondence said. Two foreign investors hold 52% shares of the IBBL, including 7.5% by IDB. When asked for his comment on the ongoing high-level changes within IBBL, Suleman said: “All the changes happened with consent of the board. Everything was done is according to the rules and system of the country. So these are the board's decisions and we stand by them.” Responding to a query on two divisions in the IBBL board, Suleman said he did not know about two groups. “I do not see a dispute. What the chairman has stated publicly in his address is where the board stands.” Asked if the reduction in shares, given the current situation of IBBL, will create a crisis in the bank, he said: “I do not think there is any risk or crisis issue... the reduction in our shareholdings is part of our tenure strategy, which was adopted in 2015. We are doing this not only in IBBL, but also in other ventures abroad.” The Islamic Development Bank is an international Islamic financial institution, established in accordance with Articles of Agreement done at the City of Jeddah, Kingdom of Saudi Arabia on August 12, 1974, signed and ratified by all member countries.