Bahraini Islamic lender Al Baraka plans to buy an Indonesian bank this year for around $100 million and has identified up to four possible options, its chief executive said on Tuesday.

'We sent in early February a delegation...to follow up on our expansion plans in Indonesia. I think the Indonesian market is a good market,' Adnan Yousif told Reuters.

'We want to buy a bank. We have looked into several options and now we have three or four banks that we are eyeing, from which we will buy one bank.'    

'It is a classical bank and we will turn it into an Islamic bank. Our budget for that is around $100 million...it will be (finalised) in the third quarter of this year,' Yousif said.   

Indonesia is becoming an increasingly attractive market for Islamic finance since the government took steps to change laws to accommodate the nearly $1 trillion industry.

Baraka bank has shown great interest in the Asian market including Malaysia and Pakistan, where it merged its Pakistan unit with Emirates Global Islamic Bank last year.

Yousif said his bank was also looking at expanding in Saudi Arabia and signed an agreement to acquire 60 percent of a Saudi investment company. He refused to name the company.

'We have signed a deal to acquire 60 percent of a listed Saudi firm, it is an investment Saudi firm. Now we are waiting for the Saudi authorities to finalise the procedures. We have got the initial approval from Bahraini and Saudi authorities,' he said.

'We expect to get (final approval) within a month. The acquisition is around $30 million to $40 million. We took it because we want to expand.. in offering Islamic investment services.'    

Yousif said that the bank's Turkish unit is going to issue Sukuk of $300 million in May while Egypt's unit will issue sukuk of $150 million at the end of the year.

'We are doing this to increase our budget, this is considered customer deposits but a long term deposit,' he said.
   
Albaraka Turk Participation Bank is the largest unit of Al Baraka and the first bank in Turkey to operate on Islamic principles. Yousif also said the bank has postponed a planned $200 million to $500 million sukuk to the third quarter of the year.
The sale was initially planned for Q1 this year. -Reuters