MANAMA — The Arab banking sector is booming with a consolidated balance sheet of $2.3 trillion and expected consolidated profits at $35 billion for 2007. These results show the robust growth of the financial sector in the region, a senior official at the Union of Arab Banks said yesterday.
Adnan Ahmed Yousif, chairman of the Union of Arab Banks, said that the Arab banks have managed to absorb much of the impact of the global credit crunch triggered by the US sub-prime mortgage crisis.
Adnan, who is also president and CEO of Bahrain-based Albaraka Banking Group (ABG), said that the Arab banking sector would continue to serve as a cornerstone of the regional economy.
“The tight control over financial institutions backed by robust regulatory regimes, the financial institutions in the Arab world posted record results in the backdrop of financial instability in the major markets including Europe and the US,” said Adnan.
Adnan, who was among the hosts of two-day event titled “Italo-Arab Finance and Banking”, which concluded yesterday, said that it was important to bring the EU and GCC blocs together as part of a strategy aimed at enhancing the base of trade, investment and commercial ties with Europe.
Adnan, who on behalf of Union of Arab Banks signed a memorandum of understanding with an Italian counterpart a few months back, said that he was positive about the outcome of this agreement. “As a result of that memorandum of understanding, the Italian banking sector has come to Bahrain to get to know more about the Arab economies, especially the Islamic banking sector,” said Adnan. “The Italian banking delegation currently on visit showed interest in attracting Arab investments in tourism and energy sectors. This appetite in the Italian market will pave the way for bolstering the existing business ties.”
Earlier, ABG unveiled a major expansion strategy focusing on the most important markets in Asia with an initial investment of $300 million within two to three years.
ABG will invest in Indonesia, Malaysia and India as this will add value to the bank’s existing presence in the most rapidly growing countries.
The expansion strategy will help the bank to consolidate its position outside the Middle East region. ABG’s half-yearly total operating income rose to $197.11 million and net income saw a 117 percent increase.
The half yearly results showed strong growth with total operating income at $197.11 million for the first six months of 2007, compared to $148.54 million in the same period last year, reflecting an increase of 33 percent.
Net income also achieved an impressive 117 percent growth to reach $120.97 million for the first six months of this year, against $55.70 million in the same period last year. Core-financing and investment activities also demonstrated noticeable growth.