The purchase of 30 percent of Bahrain Islamic Bank by Investment Dar Company in 2005 for $85 million followed by the increase ot its shares to 40% in 2006  just the first step toward Investment Dar's goal of adding a commercial Islamic bank to its family. But BIB isn't just any bank; it is the first Islamic bank that was incorporated in Bahrain, with 26 years of experience to its credit, state-of-the-art operations and a worldwide correspondence.

The fact that TID won the deal for the BIB share under fierce competition from many institutions reflects investors’ confidence in Al Dar and the regional markets’ confidence in its leadership in the Islamic financial industry. In the grand scheme, the share in BIB supports TID's strategy of diversifying its operating income and expanding its geographical reach; as for BIB, it benefits by its entrance into the Kuwaiti market and the addition of business from TID Group companies and clients for a win-win situation.

BIB was incorporated in 1979 and shortly afterwards became a member of the International Union of Islamic Banks. It has an authorized capital of BD 50 million and a subscribed and fully paid-up capital of BD 23 million. The fully paid-up capital has been divided into 230 million shares, each with a face value of 100 fills. With 12 commercial branches operating and one more to open soon, BIB's business consists of current accounts, saving accounts, murabaha, credit cards, letters of credit and medical, education and investment accounts.

Big Plans on the Horizon

TID does not intend to stop with its present 30 percent interest in BIB and the bank is an important part of a comprehensive strategy. Its intentions toward the bank fall into several stages. First, TID plans to increase its ownership to a controlling stake (more than 50 percent) by acquiring shares from the second-largest shareholder, with negotiations currently under way. Then, TID intends to move most of its clients to BIB (including almost 90,000 clients of TID and its subsidiaries). This will require raising the share capital to BD 100 million by end of 2006 and increasing the number of local branches as much as possible. This should also have the benefit of offering work opportunities in the area. The next step will be increasing the capital to BD 200 million and opening branches for BIB in all GCC countries, starting with Dubai and Kuwait.  Research on the projects should be completed during 2006, but these branches are not expected to be operational before 2008.

The Spirit of Sharia

Since its inception, BIB has placed great importance on not only being a good bank, but a good citizen as well in its responsibility towards society. One way BIB realizes its social role is through the Zakat and Qurdh Hasan Fund, which provides non-interest bearing loans for marriage, home renovation, education and medical treatment. The bank's contribution to the fund has increased from an initial BD 50,000 to a current level of BD 125,000.