Standard Chartered PLC : StanChart Forays Into Islamic Private Banking; Eyes Mideast Growth
06/25/2012| 06:20am US/Eastern
DUBAI (Zawya Dow Jones)--U.K.-based lender Standard Chartered (STAN.LN) on Monday launched a shariah-compliant private banking offering, hoping to cash in on the growing demand for Islamic finance among very wealthy Muslims in the world.
StanChart is already active in Islamic banking and in the Middle East is one of the biggest arrangers of Islamic bonds, or sukuk. The U.K. bank with a strong emerging markets focus now wants to expand its Islamic services to private banking, a relatively untapped market.
"Islam is the fastest-growing religion in the world and our footprint covers 50% of Muslims in the world," Stephen Richard Evans, regional head of private banking for Europe, Middle East, Africa and the Americas, said at a press conference.
"If there is a choice between a conventional instrument in banking and one that complies with a person's values and beliefs then we believe that that person will choose the Islamic offering and that's why we want to respond to that instinct," Evans said.
Standard Chartered's wealth management arm worldwide has around 30 offices, including two in the United Arab Emirates, and has in excess of $50 billion in assets under management.
The bank hopes to have around 20% to 25% of its assets under management in the Middle East and North Africa to be Islamic in the next two to three years, Evans said.
The broader private banking sector in the Middle East and Africa slowed down last year due to the political instability in the region but it still expected to grow 6.6% a year to reach $6.1 trillion in value in 2016, a recent study from Boston Consulting Group showed.
At the same time, Islamic banking is one of the fastest-growing segments in global finance. The head of Noor Islamic Bank said recently that the industry could grow to around $4 trillion within five years as new markets with big Muslim populations drive demand for more shariah-compliant services.
Countries such as Qatar, Kuwait and Oman also are among those with the highest density of millionaire households in the world. Due to the strong growth prospects, international private banks have been flocking to the region, opening offices and hiring relationship managers.
Standard Chartered has around 35 relationship managers in the Middle East. They will be advising clients on both conventional and Islamic products, Evans said.
-By Nicolas Parasie, Dow Jones Newswires, +9714 446 1681, firstname.lastname@example.org; Twitter: @ZDJnews
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