Qatar International Islamic Bank (QIIB) has agreed to acquire full control of the Islamic Bank of Britain (IBB) as part of QIIB's plans to develop an international banking business compliant with Sharia laws.

The deal values the British bank at around 25 million pounds ($40.19 million).

Last year, QIIB had already moved to raise its stake in IBB to 81 per cent.

QIIB is offering one pence a share, representing a discount of 70 per cent to IBB's closing share price of 3.38 pence on March 15.

Members of Qatar's ruling al-Thani family are also major shareholders in IBB, which listed on the London Stock Exchange in October 2004.

'Our long-term strategy is to build an international sharia-compliant banking business and we believe that our extensive experience in sharia banking will allow us to develop and integrate the IBB business into the QIIB group,' QIIB chairman Sheikh Dr Khalid Bin Thani Bin Abdullah Al Thani said in a statement.

'We look forward to working closely with the existing management of the IBB business and to developing it in the long term,' he added.

Islamic banking products which are sharia compliant do not charge interest on financing. Profits or losses are instead shared with the borrower, meaning they discourage unnecessary speculation and spread of risk.

Last month, Qatar said it was open to buying stakes in part-nationalised British banks Lloyds and Royal Bank of Scotland.-Reuters