Saudi Arabia's Al Rajhi Bank, the world's largest Islamic banking group, on Monday unveiled an aggressive plan to expand its operations in Malaysia to 50 branches by 2010. 
Al Rajhi has set up 12 branches since it opened for business in Malaysia with a soft launch in October, said its chairman, Abdullah Sulaiman al-Rajhi. 
The bank was formally inaugurated later Monday by Prime Minister Abdullah Ahmad Badawi. 
Al-Rajhi said the group has no plans yet to venture into other countries in Southeast Asia, but would use Malaysia as a gateway to other regional markets. 
"We would like to achieve 50 branches (in Malaysia) by 2010,'' he told reporters.  
"We look at Malaysia as a platform to do more business in this region. But we are not going to open branches in other countries. 
"We believe growth in the region is there and Malaysia is in a good position because it is a leader in Islamic banking.'' 
Malaysia awarded licenses to three foreign Islamic banks in 2004 in an effort to become a regional Islamic financial hub.  
The two other foreign Islamic banks in the country are Kuwait Finance House and the Asian Finance Bank.  
In addition, there are nine Malaysian Islamic banks. 
Islamic banks operate on Shariah law, which bans investments that pay interest - deemed usury by Muslims - or sponsor items considered un-Islamic such as alcohol, tobacco, pork, gambling or weapons. 
Banks make money using a system of profit-sharing from returns on approved investments. 
The Malaysian venture is the bank's first outside Saudi Arabia, where it operates more than 400 branches. 
Al Rajhi chief executive Ahmed Rehman said the bank is focused first on the retail market but plans to roll out corporate and investment banking products soon. 
He said the bank has more than 4,000 individual account holders in Malaysia, including a large number of non-Muslims. 
Rehman dismissed competition from other Islamic banks in the region, saying the group plans to differentiate itself with new products and high-quality service. 
Al Rajhi said the bank, which has a market capitalization of US$29 billion; euro22.6 billion), has no plans for any tie up with any local financial institutions. 
Abdullah said a more competitive environment would drive progress in Islamic banking and create greater momentum for growth in new areas like fund and wealth management. 
"I am hopeful that Al Rajhi will server as a catalyst to further improve our Islamic financial credentials at an international level,'' he said. 
He said Malaysia has proposed developing an international Islamic financial center that would offer offshore Islamic financial products and services from anywhere in Malaysia.