The UK government is poised to launch the first sovereign Islamic bond or sukuk, showing the importance of this rapidly growing business on the global banking arena, a senior banker on the sidelines of the WIBC (World Islamic Banking Conference) 2007 said yesterday.
David Pace, Chief Financial Officer, Unicorn Investment Bank, who presented a paper at the WIBC, said that the Islamic banking has emerged as a truly global business. “You can’t restrict this business to a niche market as the growth and penetration of this business is truly of a global nature.”
“The Islamic banks and financial institutions are represented in almost 75 countries and the rapid in this segment of the global financial community
Now, these institutions are represented in South East Asia and MENA region, sizeable in EU and North America Pace added: “The visibility of the Islamic bank has been increased as we have seen Islamic banking conferences in New York and Canada, the areas quite recently seen as a na�ve markets for Islamic or shariah complaint businesses.”
Talking about the UK market and FSA keenness to facilitate the Islamic banking, Pace said that recently a $200 million first sukuk has been listed on the LSE by Tabreed. “The FSA is authorising the first Shariah compliant entity to operate in the UK market. In addition now you have institutions in Albania, Netherlands, Gambia and Niger. Unicorn Bank hosted a roadshow for a $100m three year, syndication Muabaha facility in London, this all shows that this is a global business.”
However, Pace added, that despite positive development, the Islamic banking assets represents less than one per cent of the global banking assets.
He added: “We have seen massive growth in recent years with total assets under management rising to $750 billion. The industry remains largely fragmented and no Islamic bank really created global brand which demands consolidation, innovation and diversity. We need to invest in people and products and should break the traditional thinking barrier of restricting this business to traditional MENA or Arab markets.”
Highlighting the salient features of Unicorn Bank he said: “We are adopting a global strategy as we have offices already in five destinations i.e. Chicago, Malaysia, Dubai, Turkey and Bahrain.
We offer specialised business in five lines, private equity, corporate finance, capital markets and treasury, asset management and strategic mergers and acquisition.” He said that Unicorn Bank would continue to pursue the global business model. Quoting CEO Majid Al Refai he said: “We know the Islamic banking is successful and reach the potential when an old lady in Mississippi goes to a bank to open a musharka account.” “Industry is at tipping point so much worldwide interest we have to take it to next level.”