Deposits in Islamic banking services in the UAE have reached $20 billion (Dh73.6bn) and are increasing by up to 20 per cent a year, says Citi Group.
And this growth is opening the door to more Islamic financial and banking products. “Islamic banking is booming in the GCC and throughout Asia,” said Mohammed Al Shroogi, Citi’s Managing Director for the Middle East and CEO in the UAE and founding Chairman of the Citi Islamic Investment Bank.
“Huge liquidity is being generated in the GCC, while the developed world is suffering from a shortage,” he said. “This situation creates high potential investment opportunities for Middle East capital. However, the markets are still very volatile and risky, so investments should be studied carefully.”
Citi’s Islamic banking services are currently based in Dubai and Singapore, but Al Shroogi said the group will open new Islamic branches in Asia as demand grew.
Al Shrougi was speaking at the launch of new Citi Islamic products in the UAE. The services are aimed at corporate clients and take advantage of Citi’s global transactions service, which provides integrated cash management, trade, and securities and fund services to multinational corporations, financial institutions and public sector organisations. The new products include an Islamic current account, savings account, term investment and import finance, guarantees and trade services.
Al Shroogi said many Islamic service clients were expanding their businesses in other global areas and the new products would help them in their trade activities.
“The new products aim to facilitate day-to-day cash and liquidity management by business institutions in the UAE. This is an important milestone in our drive to further improve our Islamic banking offer to corporations in the UAE and a step towards meeting the working capital needs of our corporate customers.”
He said the Shariah-compliant cash management and trade products had been tailored to the needs of a growing client base of corporations seeking an alternative to conventional services.
“Citi Islamic Investment Bank has played a leading role in the development of Islamic finance globally since its inception, having successfully arranged several billion dollars of Islamic transactions for issuers in the Middle East, Asia, Europe and Latin America.
“Today we are ranked as the leading book runner of international Islamic finance transactions.”
Samad Sirohey, Chief Executive Officer of Citi Islamic Investment, said the Shariah-compliant treasury and trade services were in line with the bank’s strategy of offering Shariah-compliant working capital products in the UAE with a view to introducing them later to other markets.
He said two Shariah advisory boards looked after the products and an IT system ensured that Shariah-compliant accounts were segregated from other accounts in the bank.