Banks with Islamic services set for growth

Dubai: The number of banks offering Islamic products will increase by 50 per cent around the world by 2009 because of high public demand, the head of a newly licensed Sharia-compliant investment bank in Bahrain said.

"Some might say Islamic banking is a fashion, but it will continue to grow as people feel more comfortable with it," Mark Hanson, chief executive of Global Banking Corporation, said on Sunday. "Over the next two years, we will see an increase of 50 per cent in banks providing Islamic services globally and Islamic loans are part of that."

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In Saudi Arabia, for example, there is more pressure from shareholders to see Sharia-compliant products, he added.

Citigroup, Merrill Lynch, Morgan Stanley and Deutsche Bank, will list Islamic-structured products on the Dubai International Financial Exchange (DIFX), said Armen Papazian, senior vice-president of innovation and development at the stock exchange. The value of Islamic loans is growing by 40 per cent a year and the rate is likely to fasten, Hanson said.

The Islamic finance industry, worth about $500 billion, has been growing at about 10 per cent a year.