DUBAI,(Reuters) – Ajman, a member of the United Arab Emirates federation, plans to raise 550 million dirhams ($150 million) in an initial public offering this month to create an Islamic lender, as demand for belief-based bank services surges.

Family-ruled Ajman, the second-smallest member of the UAE federation by population, will sell 550 million shares at one dirham each, equivalent to 55 percent of the company, Ajman Bank said in a statement on Monday.

The 10-day sale starts on Sunday. It values the bank at 1 billion dirhams and will be the UAE’s largest IPO so far this year.

“There is growing demand for sharia-compliant products,” Ajman Bank Chief Executive Officer Yousif Khalaf told reporters in Dubai.

Bank assets that comply with Islamic law, including a ban on the receipt of interest, account for about 15 percent of total bank assets in the UAE, Khalaf said.

“In five years, Islamic banks will have a 30 percent UAE market share … we want to be a part of that growth,” Khalaf said.

The bank would be the seventh UAE lender that complies with Islamic law. HSBC Holdings Plc is advising on the sale.

The Ajman government would own 25 percent of the capital, and financial institutions and individuals the remaining 20 percent, Khalaf said.

Ajman Bank plans to open its first branch in Ajman in the fourth quarter, and another nine branches covering the six other UAE members within two years, Khalaf said.

Abu Dhabi and Dubai are the biggest members of the UAE. Ajman has a population of about 300,000, out of the country’s 4.5 million people.

Citizens from outside the UAE can buy 100 million of the shares, which will be listed on the Dubai Financial Market, the bank said.

Ajman last year won initial approval from the UAE central bank to set up the lender with share capital of about 2 billion dirhams, al-Bayan newspaper reported in March, without saying how it got the information.

UAE bank assets that comply with Islamic law are growing at a faster rate than for conventional assets as demand for belief-based financial services surges, according to bankers, including Abu Dhabi National Islamic Finance CEO Aref al-Khouri.

Noor Islamic Bank, which is 25 percent owned by the government of Dubai and 25 percent by the emirate’s ruler, Sheikh Mohammed bin Rashid al-Maktoum, started operations last month as the UAE’s sixth Islamic lender.

Abu Dhabi plans to start operations of its sharia-compliant Al Hilal Bank in June.

The UAE’s biggest sharia-compliant lender is Dubai Islamic Bank DISB.DU, with a market value of more than $9 billion.