Abu Dhabi: Abu Dhabi government-owned Al Hilal Bank plans to expand its credit and retail business in the United Arab Emirates as high oil prices fuel growth in the Arab world's second largest economy, the bank's CEO said.
Speaking in an interview yesterday, Mohammad Berro said the Islamic lender is also keen to expand in former Soviet markets after it opens the region's first Islamic bank in Kazakhstan this April.
Al Hilal was launched in June 2008 and has 14 branches in the UAE.
"We contributed 20 per cent to net growth of credit in the UAE last year, the equivalent of 80 per cent of net growth of Islamic banks' credit in the country," Berro said. "That would continue this year. We expect at least the same levels of credit growth."
Most banks in the UAE have tightened lending due to tight liquidity and higher cost of funds with credit growth slowing.
The bank plans to add at least six new branches in the UAE this year as the economy continues to grow.
"Oil prices are still holding up, we didn't have the problems of the West. We are running a period of tight liquidity, debt restructuring, but our core economy is sound," he said.
Al Hilal plans to open a new Islamic bank in Kazakhstan by April after delaying its original December start date as it awaits final clearances. Initially the Al Hilal Islamic Bank Kazakhstan will start with two branches, one in Almaty and one in Astana.
Kazakhstan is central Asia's biggest economy and oil and mining are its key industries.
"Kazakhstan is our first entry into that region with a high Muslim population. It is a huge opportunity and we will look at neighbouring markets there," Berro said, without elaborating.
Al Hilal is on track to make a profit this year, he added.
Islamic banks in particular are looking to tap booming demand from the world's 1.3 billion Muslims for investments that comply with their beliefs.
Islam bans interest, investing in prohibited sectors such as gambling, pornography and alcohol and stipulates that risk and reward be shared among all those in the business venture.
Dubai, which borrowed $5 billion (Dh18.35 billion) from Al Hilal Bank and the National Bank of Abu Dhabi PJSC in November, has drawn $1 billion of the committed funds, Mohammad Berro, CEO of Abu Dhabi government-owned Al Hilal Bank said in an interview in Abu Dhabi yesterday.