Tunisia’s El Wifack Leasing plans to become the country’s third full-fledged Islamic bank by August and will receive a capital injection from the private sector arm of the Islamic Development Bank, a senior executive told Reuters.
El Wifack, rated BBB- by Fitch Ratings, will complete the conversion process through a partnership and technical assistance agreement signed on Monday with the Islamic Corporation for the Development of the Private Sector (ICD).
The ICD will inject up to 30 percent of the bank’s capital, helping it increase its authorized capital to at least 150 million dinars ($77 million), El Wifack’s general manager Mohammed Mellousse said on the sidelines of an industry conference.
It will start offering sharia-compliant deposits through eight branches and build a network of 60 branches within five years, aiming for a 1.5 percent share of Tunisia’s total banking market, he added.
Currently, there are two full-fledged Islamic banks in Tunisia, Zitouna Bank and the Tunisian arm of Bahrain’s Al Baraka Banking Group. They account for just 2.5 percent of the Tunisian financial sector, according to a Thomson Reuters study.
A range of initiatives are helping develop the country’s nascent Islamic finance industry, which was neglected before the country’s 2011 “Arab Spring” revolution.
Last month, Zitouna Bank raised its capital to 88.5 million dinars by issuing 18.5 million dinars worth of common shares to the Islamic Development Bank.