Adnan Ahmed Yusuf, Chief Executive Officer of Al Baraka Banking Group and Chairman of the Union of Arab Banks, said that the Islamic banking in the Sultanate will spread and will achieve more than 20 per cent of the domestic banking during the next five years.
Adnan Yusuf revealed in an interview with Oman Economic the interest of ABG to enter the Islamic banking sector in the Sultanate but due to factors related to the policy of the group towards the form of ownership, Al Baraka Group is currently considering the possibility of managing a bank in the Sultanate or engaging in Islamic finance if the new banking laws permit so.
Adnan Yusuf said that the Sultanate’s late entry to the field of Islamic banking is a positive factor, as the experience of Islamic banking has reached a state of maturity and the Omani market will benefit from the experiences of other countries that preceded it in this area.
He believed that the conditions of the Arab banking sector, whether Islamic or the traditional one are in good condition as they are not conflicting with what is happening in the international markets. The European countries, despite the crisis they are currently facing, they will be able to get out of the bottleneck, although it takes time to achieve this.
“For the ABG, we are currently available in 15 countries and we have our own policy in the form of ownership. We have our own way of practicing business as it is a must that the bank that we are collaborating with carries the name of the group and that the administration is in the hands of the group and we have the majority stake in the bank’s capital,” he said.
“We have the desire to assume the management of banks, as we have extensive experience in Islamic banking. We now have 450 branches in various parts of the world in 15 countries and 10,000 employees work in these branches in a volume business of $18 billion. We have the option of managing a bank in the Sultanate, but this is not the only option we have, we have another proposals. We now await the new laws, which are about to be issued in the Sultanate after allowing to practice Islamic banking for the first time and we’ll see whether these laws will allow us to exist across the Islamic finance companies,” he said.
“In general, all the options are on the table for us and for the past six or seven years, we have made studies of the Central Bank of Oman and the views of business on the Islamic banking, therefore our relationship is very old and good in the Omani market,” he said.
“I expect the success of this activity in the Sultanate, as it is known that the Omani people are conservatives and always have the desire of having Islamic banks in the country. I think the mistakes and risks will be less as there is the necessary expertise. It can request expertise in Islamic products and can find them easily, especially as some neighbouring countries to the Sultanate such as the UAE has gained much experience in Islamic banking,” he added. Expectations points out that the rate of growth of the global economy in the current year will reach about 3.4 per cent, and this calls for a kind of optimism despite the presence of many of the negative warnings.
What the world needs now is to restore confidence in the ability of the international financial system to take corrective actions sufficient to remove the fears of investors and to stimulate consumer for spending incentives to attract the owners of cash reserves to invest in the infrastructure of the developed economies.
This will help economies in trouble and will make them work to streamline their programmes that have been developed to solve debt and budget deficits.