Saudi Arabia's Al Rajhi Bank, formerly known as Al Rajhi Banking and Investment Corp, plans to open 50 branches in Malaysia within five years, a report said today.

The first branch in Malaysia will open in the second quarter of this year, the New Straits Times said quoting a statement by the bank.

Al Rajhi is the only Islamic bank from Saudi Arabia issued with a license to operate in Malaysia and will offer retail and corporate products such as car and real-estate financing, alongside mutual funds.

Third largest

The bank is the third largest in Saudi Arabia in terms of assets, after Saudi American Bank and Riyad Bank, with paid-up capital of US$1.2 billion, and nearly 600 branches in Saudi Arabia, the daily said.

Malaysia, largely Muslim but with sizeable Chinese and Indian minorities, is a leader in Islamic banking after introducing the service in 1983 which provides products and services that comply with Sharia or Muslim religious laws banning the earning of interest.

Malaysia has also issued Islamic banking licenses to Kuwait Finance House and a Qatar Islamic Bank-led consortium.