Kuwait International Bank
The Kuwait Real Estate Bank, one of the shareholders in the mega-Islamic bank being formed

According to BruneiNews.net, the creation of a planned Islamic investment megabank is in “fairly advanced stages” and it will likely be launched in the next six to 12 months. Such is the word from an executive at a firm advising on the ambitious project.

The plan has been in the works for years. It will form the world’s largest sharia-compliant lender, and is being promoted by the chairman of Al Baraka Banking Group Sheikh Saleh Abdulla Kamel.

Sheikh Saleh said last April the global financial crisis had delayed the project, but that they hoped to launch it soon.

“The key shareholders I would say are on board and we are looking for an imminent launch, within six months to a year,” Sameer Abdi, head of Islamic finance at Ernst & Young, told the Reuters Islamic Banking and Finance Summit in Bahrain.

Sheikh Saleh said the new institution so far had about 10 shareholders, including the Islamic Development Bank ISDBA.UL, Saudi Investment bank 1030.SE and the Kuwait Real Estate Bank.

Bigger Islamic banks are seen crucial for the industry to realize its growth potential and to compete with Islamic windows or subsidiaries of Western conventional banks that have large market shares in wholesale banking services.

Abdi said the bank’s “capital aspirations” were between $3 billion and $4 billion.

“It’s progressing very, very quickly, even in such tough market conditions,” Abdi said.

Conventional banks, regional as well as international, would likely play a role in the project, but their exact role had yet to be decided.

“Possibly as shareholders, possibly as technical consultants, possibly as operators, all those options are being explored,” Abdi said.

Possible jurisdictions to host the bank include Malaysia and Bahrain, with a third being considered, he said.

(Reporting by Frederik Richter, Dinesh Nair and Raissa Kasolowsky)