DUBAI, (Reuters) – Bahrain’s Gulf Finance House (GFH) said it was close to setting up a $326 million unit in Syria as the Islamic investment bank looks to boost revenues in a relatively untapped banking market.

Shares in GFH were unchanged on the Bahrain stock exchange on Sunday. In Kuwait, the shares were 1.4 percent higher.

Syria Finance House, with a capital of 15 billion Syrian pounds ($326 million), would be GFH’s first expansion with the potential to bring additional fee income in about a year.

GFH and other financial institutions will fund 60 percent of the new bank, while 10 percent will come from local investors. The remaining 30 percent will be offered to the public, GFH said in a statement, adding the venture was still awaiting central bank approval.

“Islamic commercial and investment banking in Syria promises great potential for growth with a significant demand for Islamic financial services and low penetration,” said Group Chief Executive Ted Pretty.

GFH, which was hard-hit by a property crash in the Gulf Arab region, escaped default on a $300 million loan in February by striking an eleventh-hour deal to roll over one third of the debt by six months.

Seven years ago, Syria relinquished its monopoly of the banking sector which was nationalised along with much of the rest of the economy after the ruling Baath Party took power in 1963.

Around 13 privately held commercial banks now operate in the country alongside six government banks which still have a dominant share of the assets.

GFH is the latest among a raft of firms from the Gulf and Egypt to focus on Syria. Egyptian investment bank HC Securities and Investment received permission in February to open an office in the country.

GFH plans to raise $250 million through asset sales in the first quarter of 2010, and has shed jobs in a bid to cut costs.