Islamic banking shineszulkiflihasan
Islamic banking shines
Issac John Available at: http://www.khaleejtimes.com/DisplayArticleNew.asp?col=§ion=business&xfile=data/business/2011/December/business_December195.xml
12 December 2011, 9:01 PM DUBAI – Islamic banking assets in the UAE are predicted to grow to 20 per cent of the total banking sector in 2012 from an estimated 18 per cent this year, Standard Chartered Saadiq, the Islamic arm of the bank, said on Sunday.
The bank said it expects Islamic assets to constitute 38 per cent of total consumer banking assets in the UAE in 2012, compared to about 35 per cent in 2010. It didn’t provide a 2011 estimate. According to the Dubai Chamber of Commerce and Industry, the collective assets of the eight Islamic banks in the UAE were Dh269 billion at the end of 2010, accounting for around 16.2 per cent of the overall banking assets of Dh1.66 trillion.
Globally, the Islamic banking industry is estimated to be worth $1 trillion, the bank said as it unveiled its new customer offerings for UAE customers, in response to growing interest in and customer demand for Islamic finance in the country and across the region.
Ernst & Young said in a report that Islamic banking assets with commercial banks globally would reach $1.1 trillion in 2012, a jump of 33 per cent from the 2010 level of $826 billion. In the Middle East and North Africa, Islamic banking assets increased to $416 billion in 2010, representing a five year compound annual growth rate of 20 per cent compared to less than nine per cent for conventional banks, Ernst & Young said in a report. “As new geographies open up to Islamic banking, the Mena Islamic banking industry is expected to more than double to $990 billion by 2015,” it said.
In the backdrop of the fast growing demand for Islamic banking, a group of Islamic financial institutions launched the world’s first benchmark for Islamic interbank lending a few weeks ago as an alternative to LIBOR, or the London Interbank Offered Rate.
The LIBOR alternative, known as Islamic Interbank Benchmark Rate, or IIBR, uses the contributed rates of 16 Islamic banks and the Islamic sections of conventional banks to provide a reliable alternative for pricing Islamic instruments to the conventional interest-based benchmarks used for mainstream finance.
Standard Chartered Saadiq said it plans to start Islamic banking operations in Nigeria and Oman next year, as it looks to grow its Shariah-compliant business in the Middle East, Africa and southeast Asia.
The bank said it enhanced Islamic banking offering has been designed specifically for individuals and small and medium enterprises providing them with Shariah-compliant banking products and services.