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Dubai bank plans $1 bln Islamic bonds for acquisition

DUBAI - Emirates Bank International EBIL.DU, Dubai’s largest lender by market value, said on Tuesday it is seeking to sell as much as $1 billion of Islamic bonds to finance acquisitions and expand retail lending.

Emirates Islamic Bank, a unit of Dubai government-controlled Emirates Bank, will use the funds to buy stakes in financial institutions in Asia, Europe, and the Middle East, Abdulla Showaiter, general manager of corporate and investment banking, told Reuters in Dubai.

It also wants to expand its range of lending products that comply with an Islamic ban on the charging of interest.

“We are looking for controlling stakes, both to diversify our income and to build stategic relationships,” Showaiter said. The bank is in acquisition talks, Showaiter said, declining to give details.

Emirates Islamic, whose parent company plans to merge with National Bank of Dubai to create the biggest lender in the Gulf by assets, plans to sell the first group of $350 million of bonds next month, Showaiter said.

Standard Chartered Plc will arrange the sale, he said.

“We are one of the fastest growing Islamic banks in the world, and we need to cope with increased demand from local and international customers,” Showaiter said.

He declined to give price guidance for the bonds.