By Abdulla Fardan/Bloomberg
Bahrain: Arab National Bank, a Saudi Arabian lender, said it and partners will set up a 2 billion-riyal ($530 million) Islamic-compliant home-finance company as demand for mortgages in the largest Arab economy grows.
Arab National and Kingdom Installment Co. each will hold 40% of the company, the Riyadh-based bank said in a statement on its Web site on 8 April. Dar Al-Arkan Real Estate Development Co. will own 15% and the World Bank’s International Finance Corp. unit will hold 5%, the statement said.
The company will be the largest Islamic property financing company in the Middle East and North Africa, Dar Al-Arkan, also based in Riyadh, said on its Web site.
“About 80% of Saudi citizens can’t buy a property with their own money,” said Walid al-Murshid, regional investment director at the International Finance Corp.
Dar Al-Arkan has so far provided 3,000 Saudi customers with home loans, General Manager Hathlool al-Hathlool said.
The finance company has received initial approval from the Saudi Arabian Monetary Agency.
Property development is booming in the Persian Gulf region, including Saudi Arabia, as high oil revenue has been flooding the regional markets for more than three years now.
Shares of Arab National Bank rose 1.8% to 71 riyals in Riyadh today, giving the company a market value of 32.3 billion riyals.