Mideast investors eyeing Indonesian banks

  • Share via facebook
  • Tweet this
  • Bookmark and Share
EXPANSION PLANS: Kuwait Finance House and a consortium of lenders are looking to Indonesia for new branches. (ITP Images)

EXPANSION PLANS: Kuwait Finance House and a consortium of lenders are looking to Indonesia for new branches. (ITP Images)

Several investors from the Middle East want to set up new banks or invest in existing lenders in Indonesia, an Indonesian government envoy to the region said on Monday.

Alwi Shihab, President Susilo Bambang Yudhoyono's special envoy to the Middle East, said that the Kuwait Financial House , the biggest Islamic lender in Kuwait, and a consortium of investors from Saudi Arabia, Yemen, Qatar and Bahrain are interested in setting up new banks, but he did not say whether these would be conventional or Sharia banks.

He also said that Qatar National Bank is considering buying a majority stake in a conventional bank. Indonesia, the world's most populous Muslim nation, is keen to develop its market for Sharia investment products and attract more investment from the Middle East.

Indonesia's parliament this year passed a revised bill on value added tax (VAT) which scrapped double taxation on transactions in Islamic financial markets, a move which many analysts expect will help to attract more funding from Islamic investors.

"The Middle East sees Indonesia as a place to invest," Shihab said. " The Kuwait Financial House was waiting for the tax ruling on Sharia and they're satisfied after the changes."

The central bank estimated Sharia banking assets could climb to 57-68 trillion rupiah ($6.04 billion) this year and grow to 72-124 trillion rupiah in 2010, compared with 50 trillion rupiah in 2008.

Despite the growth, Sharia banks remain relatively small compared with conventional banks which had assets of more than 2,300 trillion rupiah at the end of 2008. (Reuters)

Related:

Market Performance

Kuwait Finance House - Kuwait
670.0
-10.0 -1.47 (%)
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Coming to America

Coming to America

As Barack Obama seeks to rebalance the bloated US economy, the...

Should the Gulf introduce VAT?

Should the Gulf introduce VAT?

The GCC’s plans to bring in value-added tax were withdrawn as...

5
Why are some of the world's biggest banks leaving the UAE?

Why are some of the world's biggest banks leaving the UAE?

Large Western banks have been selling off their local assets...

2
Most Discussed
  • 17
    Nakheel PR: The toughest job in Dubai?

    You forgot to mention the sewage pit between JLT and Jumeirah Park and the terrible landscaping in Jumeirah Park The chain link fencing they want to install... more

    Monday, 30 March 2015 9:05 AM - An Emaar Fan
  • 14
    Dubai Int'l T1 is too congested, says Indian airline boss

    Question: All you people, criticizing my comment, do you work for Air India by any chance?

    Additionally, for all the whiners, I will provide you... more

    Tuesday, 31 March 2015 12:50 PM - Mosa
  • 9
    Post traumatic stress?

    I once had a Emirates Post employee hang up on me when I asked her to repeat something. That said, the worst is my management company, Kingfield Management... more

    Sunday, 29 March 2015 6:07 PM - Sarah