HSBC Holdings will close its Islamic banking unit HSBC Amanah in Qatar by the end of the year, Europe’s biggest bank confirmed Tuesday.
Staff working at HSBC Amanah will be “absorbed” into the conventional business with no job cuts predicted, the bank said in an emailed statement.
The move follows a ruling by Qatar’s central bank in February that asked mainstream lenders to close down their Sharia-compliant operations amid worries of overlap between the two.
The order gave lenders a grace period until December 31 to shutter operations but did not provide clarity on whether banks can apply for separate Islamic banking licences or sell assets to Qatar's wholly-Islamic banks.
The edict was seen as a windfall for standalone Islamic banks, which will benefit from a much larger customer base once the ruling comes into effect.
HSBC said in April that it planned to lay off three percent of its 12,000-strong workforce in the Middle East and North Africa in a bid to cut operational costs across the company.
The bank told Arabian Business earlier this month that it had no further staff cuts planned this year.
HSBC, one of the largest and oldest international banks in the region, posted a profit of $892m for its Middle East and North Africa operations in 2010, up from $455m in 2009. The MENA region accounts for around five percent of revenues.