Ithmaar Bank has announced plans for a comprehensive reorganisation with its wholly owned subsidiary, Shamil Bank.

The plans, which will see Ithmaar Bank emerging as a premier Islamic retail bank, involves both banks pooling their resources to create a single, more efficient and significantly strong retail-focused Islamic bank, under the Ithmaar brand. This business model adopted by the bank is part of its new strategy.

The reorganisation plans, which will further improve liquidity, lower the risk profile and enhance shareholder value by amplifying existing synergies, will put the bank in a better than ever position to capitalise on the exciting business opportunities that are now being created, according to a statement.

“The comprehensive Ithmaar-Shamil reorganisation will streamline our group structure and work process, dramatically improving our efficiency. It will also further enhance our liquidity and bolster our regulatory capital while facilitating higher standards of corporate governance,” said  Ithmaar Bank chairman Khalid Abdulla-Janahi.

The reorganisation will, in effect, turn Ithmaar Bank into an Islamic bank with a retail license. The assets, liabilities and business of Shamil will be acquired by Ithmaar.

Following the reorganisation, Ithmaar will undertake retail banking activities locally and regionally while maintaining its investment activities. The bank will apply Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) standards.

“Shamil Bank will see its brand replaced by Ithmaar Bank, which will emerge as a much larger, stronger, full-service Islamic bank that will be better equipped than ever before to take advantage of new and exciting business opportunities in the Islamic banking and financial services sector,” said Ithmaar Bank chief executive officer and member of the board, Mohamed Hussain.

Since its 100 per cent acquisition late 2007, Shamil Bank has been operating mainly as the Islamic retail banking arm of its parent company Ithmaar Bank.-TradeArabia News Service