Islamic banking set to triumph

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.

Islamic banking conference set

MUSCAT — The Sultanate’s first conference on Islamic banking and finance will be held next week in co-operation with the Central Bank of Oman (CBO).

The two-day conference, due to be held at Al Bustan Palace Hotel on January 23 and 24, will be organised by Al Iktissad Wal-Aamal Group.

The opening ceremony of the conference will be presided over by Darwish bin Isma’eel al Balushy, Minister Responsible for Financial Affairs.

The conference will tackle key issues on the Islamic financial industry, including policies and regulatory perspectives of Islamic finance, the growth of Islamic banking and its international propagation, Islamic finance and capital market activities, the supervisory and regulatory role of the Sharia code and socio-economic accountability.

Conference is also to consist of sessions revealing the latest research and studies accomplished by a group of prominent specialists, academics and senior staff in the financial and Islamic banking sectors, from diverse regional and international leading organisations and corporations in the industry.

The conference will bring together around 400 participants from various Arab and Islamic countries, including representatives of foreign banks and investment firms and commercial and consulting firms and a number of Sharia panels in the Arab and Asian countries.

Speakers include Hamoud bin Sangour al Zadjali, CBO Executive President, Sultan bin Nasser al Souwaidi, Governor of the Central Bank of the UAE, Ra’ed Charaf Eddine, First Vice-Governor of the Central Bank of Lebanon, Adnan Ahmed Youssef and Chairman of the Union of Arab Banks. — ONA

More Arab banks eye local chances

Interest by Gulf lenders in Turkey’s Islamic banking market is on the rise, according to Adnan Ahmed Yusuf Abdulmalek, head of Union of Arab Banks

A customer walks past the main entrance of Bank Audi head office in Beirut. The lender owned by the Lebananese Sal-Audi Saradar Group has been the only foreign bank granted license to operate in Turkey in the last 14 years.

Leading Arab banks are currently eyeing opportunities to penetrate Turkey’s growing finance market, the top executive of Union of Arab Banks said yesterday, adding that possible investors consider merger and acquisitions.

“Banks from Arab countries and Gulf countries are highly interested in Turkey,” said Adnan Ahmed Yusuf Abdulmalek, head of Union of Arab Banks. Emirates International Bank and Qatar International Bank are among the banks interested in starting up new banks from scratch, he said.

“If the barriers were eliminated by Turkish authorities, there would be many Arab banks and a large group of investors investing in Turkey’s banking sector,” he said, adding that Turkish banks would benefit a great extent through such investments.

“The interest from the Arab banks will be even higher now on,” he said. Bank Audi has been recently granted with a license to found a Turkey unit, he said.

Arab banks and investors have been encouraged by the decision for investing in Turkey’s banking sector upon the decision, he said, and possible investors consider founding new banks as well as merger and acquisitions with Turkish banks.

Bank Audi encourages Gulf banks

Abdulmalek said Lebanese Bank Audi gave the sign to other possible investors in Arab and Gulf countries to prioritize Turkey in their investments. Turkey continues to increase its influence both politically and economically in the region, he said.

“If the investment climate in Turkey’s banking sector improved and Turkey would authorize licenses for more foreign banks, leading banks in the region such as Dubai Islamic Bank would want to open branches in Turkey,” he said. The Arab Banks would be interested in operating in participation banking in the country.

Turkey’s Banking Regulation and Supervision Authority (BBDK) gave a license to Lebanon Bank Audi Sal-Audi Saradar Group to establish a bank in Turkey. Having been the only foreign bank granted license to operate in the country in last 14 years, the bank was authorized to collect deposits in Turkey with a capital of $300 million on Oct. 28.