Abu Dhabi Commercial Bank says an Islamic banking subsidiary will be operational by end of year.
Abu Dhabi Commercial Bank said on Sunday it plans to set up a unit this year offering services that comply with Islamic law, such as ban on the receipt of interest.
"It is on the table and it is high priority for us to set up an Islamic banking subsidiary," Chief Executive Officer Eirvin Knox said in an interview in Abu Dhabi.
"By the end of the third quarter, we will submit a business plan for approval, and we hope to get approval and then get it operational by end of the year," he said.
Demand among the world's 1.2 billion Muslims for financial services that comply with their faith is surging as Gulf Arab nations reap a windfall in oil revenue on a tripling in prices since the start of 2002.
Sharia bans the charging of interest, equating it with usury, and prohibits investment in businesses that trade in alcohol or gambling.
The Islamic finance industry, worth about $500 billion in assets, has been growing at about 10 % a year for the last decade, Standard & Poor's ratings company said in a report in April.
In the Gulf and Muslim nations in Asia, 20 % of banking customers would now choose an Islamic financial product over a conventional one with a similar risk-return profile, S&P said.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.