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StanChart eyes Islamic finance expansion

StanChart eyes Islamic finance expansion

(3 November 2016 – China) In a recent press briefing senior Standard Chartered executives discussed the potential for Islamic banking in the global market.

The CEO for the bank’s global Islamic banking business, Standard Charted Saadiq, Rehan Shaikh, Global Head of Islamic Origination, Ahsan Ali and Ali Allawala, Head Islamic Banking-Retail Clients were bullish on the industry’s Asia growth.

Sheikh said that Islamic finance assets, currently estimated at US$1.8 trillion (A$2.3 trillion) globally, are expected to grow to US$3.3-3.5 trillion by 2020.

Much of this growth will come from Sukuk issuances, according to the trio’s projections.

Ali added that Sukuk is now mainstream component of capital markets in core countries such as Malaysia and the UAE, and that several more issuance should be coming, primarily from sovereign, quasi-sovereign and financial institution issuers.

“The GCC has been the primary driver of the international Sukuk issuances. Malaysia is a very strong market, but we haven’t seen [the same] in terms of international dollar issuances—GCC is in the lead,” Ali said.

According to Shaikh, Standard Chartered Saadiq’s core markets are Malaysia, UAE, Pakistan, Indonesia and Bangladesh, but that it is looking to grow parallel with Standard Chartered’s existing conventional operations across the world, including entrance into Brunei and more African markets.

“Africa is a huge space where there are a lot of queries that are coming out…there is always talk about penetrating that market,” Sheikh said, though he added that there are “no real plans in terms of which countries we would go in.”

Standard Chartered Saadiq opened its first African operation in Kenya in 2014, however Standard Chartered has operations across 16 African and 23 Asian countries.

“We will complement the global footprint that we have,” Sheikh said.

Saadiq will also be growing its product base to compete with the conventional side’s offerings. Allawala told reporters that Saadiq’s Indonesian aims to launch Takaful products by early 2017.

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