Dubai's Noor Islamic Bank said on Tuesday it was putting a dramatic global expansion plan on hold due to the global financial crisis.

Instead, it will focus on opening a new bank and insurance branches in its home market.

When Noor Islamic launched a year ago, its chief executive said the lender aimed to be the world's largest Islamic bank within five years, spending as much as $1 billion on individual acquisitions in countries such as Indonesia, Egypt and Britain.

'We have put on hold some of our ambitious plans,' Hussain Al-Qemzi told reporters at the launch of two Islamic insurance, or takaful, companies.

'We are focusing on consolidating in this market ... we will review these (global expansion) plans by the end of 2009.'    

A global financial crisis has put the brakes on an economic boom in the Gulf region, including in Dubai, where a building boom is unravelling, property firms are laying off staff and banks are facing tight liquidity conditions.

Noor -- 25 percent owned by the government of Dubai and 25 percent by the emirate's ruler -- was still on track to open 17 branches in the UAE by the end of the first quarter, and 20 by the end of the year, Al-Qemzi said.

'There is a crisis ... we have been affected because the whole banking sector has been affected, he said, adding that liquidity in the banking sector would remain 'difficult' for much of this year, but should improve by September.

The UAE central bank and finance ministry have set up 120 billion dirhams ($32.67 billion) worth of emergency funding facilities to help local banks cope with the crisis.

Noor Investment Group, the Islamic bank's parent firm, on Tuesday launched Noor Takaful Family and Noor Takaful General to help diversify its revenues. Islamic insurance had been growing about 20 to 25 percent per year in Gulf countries, it said.

The firms, which are seeking to secure 5 percent market share in five years, would start with one branch in each of Dubai, Abu Dhabi and Sharjah before considering expansion in the Gulf.

A combined $150 million of paid-up capital would be able to sustain them for two to three years, said Ahmed Aljanahi, Noor Investment's deputy group CEO.

Despite the economic slowdown, Islamic insurance still had room to grow in the chronically under-insured Middle East, Qemzi said. There are about eight takaful insurers in the UAE compared with more than 52 conventional insurance firms. - Reuters