KUWAIT: Islamic banking is growing at more than double the pace of conventional banking in Kuwait and strong demand is expected throughout the Arab region, the chairman of Boubyan Bank said yesterday.
Credit volumes at Islamic banks in Kuwait reached KD11.1bn ($39.3bn) in the first nine months of 2012, up 13.2 percent on last year, Boubyan Chairman and Managing Director Adel Abdul Wahab Al Majed told the Reuters Middle East Investment Summit.
That compares with 5.6 percent credit growth to KD18.6bn at conventional banks, Majed said.
The hunger for Shariah-compliant banking in Kuwait means that Boubyan is not interested in overseas expansion quite yet, in contrast to more-established rival Kuwait Finance House (KFH).
“Innovation or presence outside, it is only a matter of time (for) the likes of us and others,” Majed said. “Right now we are busy because the slice of Islamic pie in Kuwait is big.”
However, in 2014 the bank will set out a new five-year strategy, which will include the possibility of an international presence.
This year’s Arab Spring uprisings are expected to boost Sharia-compliant banking in the Middle East and North Africa because of the new Islamic governments it created, Majed said.
During the financial crisis of 2009 Boubyan reported a net annual loss of KD51.7m. This background has made the bank cautious about expansion.
“I think the mistake is that it started venturing outside before it had a stable, profitable base in Kuwait,” Majed said.
Since 2009, earnings have grown and the bank reported an KD8m net profit in 2011.
Reuters
