NCB’s Shariah board says the bank’s IPO is ‘halal’

The Sharia board of the National Commercial Bank (NCB) said the bank’s initial public offering is compliant with Sharia and is a halal investment.

NCB plans to float 25 percent of its capital for the first time starting October 19 till November 2.

The board said they based their opinion on the premises that 67 percent (over two thirds) of the bank’s assets were Sharia-compliant at the end of June 2014.

Around 92 percent of NCB’s deposits, the board added, were drawn from Sharia-compliant sources, and 73 percent of income generated from Islamic transactions in the same period.

The board said in a communiqué they were confident NCB had a plan to move to a wholly Sharia-compliant business model within ‘a reasonable period of time.’

The communiqué was signed by Sheikhs Abdullah bin Sulaiman Al-Manea, Dr. Abdullah bin Abdulaziz Al-Musleh, and Dr. Mohamed Ali Al-Qurri.

Saudi Arabia’s permanent committee of fatwa, the kingdom’s highest religious authority, had ruled the IPO non-compliant with Sharia as well as any investment on traditional financial basis.