JEDDAH, 11 June — Islamic banks are being challenged to diversify and develop new sources of revenue rather than simply competing on price against each other in a narrow range of products. It is “the need of the hour if our industry is to grow,” Atif A. Abdulmalik, Chief Executive Officer of the First Islamic Investment Bank, Bahrain, is quoted as saying in the latest edition of Jane’s Islamic Affairs Analyst newsletter.
Abdulmalik underlines the potential of the industry to unlock greater funds and forge for itself a major niche market. He adds: “If we structure a product in a way that is acceptable in Islam, not only are we conducting our business in accordance with Islam but also, from a business point of view, differentiating ourselves and carving out a niche in the wider, extremely competitive financial services industry.”
The Islamic finance market worldwide is worth an estimated $200 billion and growing at 15 percent a year. The ten largest Muslim states also have a combined GDP of $1.2 trillion and there are 150 million Muslims living in non-Islamic countries, demonstrating the sector’s phenomenal potential for further growth.
The newsletter carried out the survey during the first hugely successful International Islamic Finance Forum earlier this year in Dubai which attracted around 300 leading industry figures from around the world.
A second Forum takes place in Geneva, Switzerland, next month with an equally challenging agenda tackling head-on the major issues facing the industry. Over two days, the Forum’s wide-ranging debates will cover the problems of the regulatory environment for Islamic finance; issues raised by Islamic private banking and wealth management; and emerging new Islamic project and asset financing models.
Delegates will also discuss with Islamic scholars the influence of religion and ethics on investment practices and explore innovative solutions for the Islamic finance market of today and tomorrow.
Among the participants will be Abdulmalik , Ahmed ibn Mohammed Al-Khalifa, Governor of the Bahrain Monetary Agency, Khalid Janahi, group chief executive, Dar Al-Maal Al-Islami, Switzerland, and Jonathan M. Winer, former US Deputy Assistant Secretary of State for International Law Enforcement.
The International Islamic Finance Forum series is organized by the Institute for International Research offices in Dubai in association with the New York offices of Dow Jones.