Qatar Islamic Bank eyes Indonesian acquisition

QIB plans to tap demand for sharia banking products in the world's most populous Muslim nation
Qatar Islamic Bank eyes Indonesian acquisition
ISLAMIC FINANCE: Indonesia, where about 85 percent of the population are Muslim, is seen as the next major growth centre for Islamic finance (ITP Images: Image for illustrative purposes only)
By Reuters
Wed 12 Jan 2011 09:07 AM

Qatar Islamic Bank is

hunting for acquisition targets in Indonesia to strengthen its

presence in Asia and tap demand for sharia banking products in

the world's most populous Muslim nation, the head of its

Malaysian unit said on Wednesday.

Qatar Islamic is studying several potential

candidates in Indonesia that have been identified by Asian

Finance Bank, which is 62 percent-owned by the Gulf lender.

"In Indonesia, the competition is robust so we need

something which is ready-made for us to kickstart

immediately," Asian Finance chief executive Mohamed Azahari

Kamil said.

"We need to have a partner that has both a corporate and

retail base that we can capitalise on."

Azahari said "nothing concrete has transpired" in the

acquisition plans and formal talks had yet to begin but

declined to elaborate on the possible targets.

"We're talking about Asia as a whole because we believe

there is a lot of potential for Islamic finance even to grow

in South Korea," he said. "The Indonesian operations, if it

materialises, will provide a very good presence within the

region."

Indonesia, where about 85 percent of the population are

Muslim, is seen as the next major growth centre for Islamic

finance as traditional markets such as Gulf states and

Malaysia reach saturation point. Indonesia has 11 Islamic banks.

Indonesia expects its sharia banking assets to reach 130

trillion rupiah by the end of 2011, from an estimated 90-92

trillion rupiah in 2010, according to the central bank. They

grew by an average 33 percent in the last five years.

The Southeast Asian country is overhauling its regulatory

framework to accelerate demand for Islamic products but some

bankers say it could take years for the changes to bear fruit.

RUSD Investment Bank owns a fifth of Asian Finance Bank,

Financial Assets Bahrain has 8 percent and Tadhamon

International Islamic Bank 10 percent.

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