Islamic banks begin exploring new areas in order to seek new growth.
Abu Dhabi Islamic Bank plans to develop Sharia wealth management opportunities in Asia, with Malaysia, Indonesia and Singapore seen as the fastest-growing markets, a top official said on Monday.
Speaking on the sidelines of an Islamic banking conference in Bahrain, Malik Sarwar, the bank’s executive vice president for global wealth management said: "Ethical investing has now become a norm and Islamic banking and wealth management to us is the next level of ethical because there is a spiritual element to that."
"The segment that's growing the fastest is asset management or investments business and especially targeted towards the affluent and high net-worth customers."
He declined to give details on the bank's expansion plans.
Globally Islamic banks are expected to seek new growth from asset management and personal finance after profitability took a hit this year, due in part to a wide exposure to the real estate sector, especially in the Middle East.
"Islamic banks' profitability has declined at a steeper pace, narrowing the gap with conventional banks," consultancy McKinsey & Company said in a report issued on Monday.
"Revenues have declined significantly from 2008, particularly driven by a drop in income from investing activity. In these market conditions, Islamic banks must now determine their future course of action by exploring four important areas," it said, adding that asset management was one of those areas.