Ithmaar Bank is set to implement plans for a comprehensive reorganisation with its wholly-owned subsidiary, Shamil Bank after receiving verbal approval from Central Bank of Bahrain (CBB), said a top official.

Ithmaar Bank chairman Prince Amr Mohammed Al Faisal told shareholders on Sunday that the bank had received verbal approval to proceed with its reorganisation plans, and that formal, written approval will follow shortly.

Prince Amr was speaking at the shareholders’ general assembly held at the Diplomat Hotel in Bahrain.

The chairman said the reorganisation will transform Ithmaar from a conventional investment bank into an Islamic retail-focused bank.

'It involves both banks pooling their resources together to create a single, more efficient and significantly stronger retail-focused bank with an Islamic license, under the Ithmaar brand,' he added.

According to Prince Amr, the plans for the reorganisation were approved by Ithmaar shareholders in November 2009, during an EGM.

“The Ithmaar Board of Directors received yesterday assurances from the Central Bank of Bahrain, the Kingdom’s financial services regulator, that the reorganisation plans had been approved and that formal written approval is now being issued,” he disclosed.

“This allows us to start Ithmaar’s transformation, from a conventional investment bank into an Islamic retail-focused bank, and to focus upon realising our new strategic objectives,” the chairman said.

Following the reorganisation, and as part of its new board-approved three-year strategic plan, Ithmaar will focus on developing its retail operations, by expanding its products and services range as well as its delivery channels, and on expanding its geographical reach across the GCC region by offering a wide range of corporate banking services, he added.

According to Prince Amr, Ithmaar had announced a number of capital raising initiatives designed to raise a total of up to $400 million to fund this planned expansion.

The capital raising initiatives, which included the launch of a mandatory convertible sukuk, kicked off on a high note earlier this month with the successful launch of a rights issue.

“The subscription period ended on Thursday, and we are pleased to report that the rights issue has raised $103 million,” said Ithmaar Bank CEO Mohamed Hussain.

“The Offering was an opportunity for current shareholders to further consolidate their stake in Ithmaar Bank – and the fact that it proved so successful is testimony to our shareholders’ unwavering faith in the Bank’s potential,” he said.

“The increased capital, which comes immediately ahead of the CBB’s formal, written approval of our reorganisation plans, will help further support the Bank’s retail, corporate and financial institutions activities, and enhance shareholder value by amplifying existing synergies,” Hussain observed.

“This perfectly positions Ithmaar for its planned growth, and we are grateful to the CBB for their continued support and guidance,” he added.

At the AGM, Ithmaar shareholders also elected its new board of directors.

The new board comprises: Prince Amr Mohammed Al Faisal, Khalid Abdulla-Janahi, Tunku Dato’ Ya’acob Bin Tunku Abdullah, Abdulhameed M. Aboumoussa, Sheikh Mohammed Youseef El Khereiji, Shaikha Hissah bint Saad Al-Sabah, Khalil Nooruddin, Zamil Abdulla Al-Zamil, Mohammed A. Rahman Bucheerie and Nabil Khalid Kanoo.-TradeArabia News Service