By Shanthy Nambiar
Kuwait Finance House KSC, the world's second-largest Islamic bank, said it plans to expand in India and China to target the $1 trillion dollar global market for services that comply with the religion's Shariah law.
The 31-year-old bank, using its hub in Malaysia, may open representative offices, offer real estate funds or invest directly in those markets, Chief Executive Officer Mohammed Sulaiman Al-Omar said from Kuwait City. Kuwait Finance aims to become a conduit from which companies and funds can tap clients across Asia and the Middle East.
``It is two big markets we cannot ignore,'' Al-Omar, 49, who is also general manager, said in an interview yesterday. ``Should we wait until the market is saturated or should we jump in today? We see growth and therefore we decided it will be on our radar.''
Middle East banks are turning to Asia as wealth held by the region's millionaires swells at a faster pace than in the U.S. and Europe and economic growth in India and China outpaces the Persian Gulf. Asia is home to about half of the world's Muslim population of 1.5 billion.
The wealth of high net-worth individuals in the Asia-Pacific region may grow by 8.5 percent a year to $12.7 trillion by 2011, the second-fastest increase after the Middle East, Merrill Lynch & Co. and Capgemini SA said in a 2007 world wealth report.
India and China ``are lucrative for Islamic banks,'' said Ritesh Maheshwari, Singapore-based bank analyst at Standard & Poor's. ``Islamic finance has reached a critical mass and there is enough buzz that it makes sense to reach out to beyond the predominantly Muslim countries.''
With assets of about $33 billion, Kuwait Finance has banking operations in Bahrain, Turkey and Malaysia. It plans to start an investment company in Saudi Arabia by the end of June pending regulatory approval, Al-Omar said.
To contact the reporter on this story: Shanthy Nambiar in Bangkok at firstname.lastname@example.org.
Saturday, March 22, 2008
By Shanthy Nambiar