Venture Development

Islamic banking is a viable business.  Analysis suggests that Islamic deposits with GCC banks are poised to grow to $100 billion by 2009, from just under $53 billion in 2004.  A new generation of well capitalized Islamic commercial and investment financial institutions are being launched, and conventional and global banks are targeting Islamic banking segment through Islamic window operation.  Still more, several conventional banks are transforming their retail and commercial banking services to be Sharia’ compliant.  In Saudi Arabia, the market share of Islamic deposits crossed the 30pc threshold following the transformation of the retail banking operation of a leading commercial bank.

In Pakistan, the re-emergence of Islamic banking industry since 2002 is championed by the central bank, SBP.  On the back of higher economic activity, banks are posting strong return on equity, many in excess of 25pc.  Islamic banking industry looks set to capture 12 percent market share by 2012, implying an additional $15 billion in deposits under management.  The central bank appears receptive to awarding new Islamic commercial banking licenses to foreign and domestic players that meet the defined criteria.  Ithmar, Dubai Bank, Dubai Islamic Bank, Al Baraka, Unicorn, BankIslam Malaysia and Islamic Corporation for Development of Private Sector are some of the key players that have recently entered Pakistan market.

The sizeable Islamic funds have implications for banks, investors and corporates.  Strategies need to be re-aligned to target the fast emerging Islamic investors.  Islamic financial institutions have additional unique requirements.  Institutions that tried to simply replicate the conventional banking model to start Islamic initiatives have seen their shareholder value deteriorate over the years. 

With its network of associates and relationships in Bahrain, Dubai, Malaysia and UK, the Islamic Capital team assists in the development of new Islamic financial institutions on turnkey basis, from concept plan to business launch to IPO. 

Our credentials include setting up Islamic windows of conventional banks, full fledged Islamic banks, takaful and re-takaful business, asset management companies, private equity funds, leasing business and banc assurance initiatives.