Islamic lenders have strong prospects

DUBAI – Recent regulatory changes in Kuwait and Qatar, retail client preferences for Shariah-compliant banking products, and stronger balance sheets and funding positions, offer better growth prospects for Islamic banks compared with conventional peers.

HSBC said as it initiated coverage on four Islamic banks.The brokerage initiated Saudi Arabia’s Alinma Bank and Qatar Islamic Bank with “overweight”.

In an October note, the brokerage said it expects Alinma, which has no legacy credit risk in its loan portfolio, to double its market share in the medium term, helped mainly by corporate lending.

HSBC said it expects Qatar Islamic Bank to gain from recent regulatory changes in the country that do not allow conventional banks to offer Islamic banking services.

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