Arab Today, arab today uae’s adib gets green light to operate in qatar
Last Updated : GMT 22:02:29
Arab Today, arab today
Arab Today, arab today

UAE’s ADIB gets green light to operate in Qatar

Arab Today, arab today

Arab Today, arab today UAE’s ADIB gets green light to operate in Qatar

Abu Dhabi - Arabstoday

Abu Dhabi Islamic Bank has got the go-ahead from Qatar to open an Islamic branch there, a move analysts said could prompt other Islamic lenders in the region to follow. Qatar\'s central bank issued a ban in February on conventional banks operating Islamic branches amid concerns of an overlap. Concerns also emerged that conventional lenders with Islamic operations had an unfair advantage over standalone Islamic institutions. Lenders have until Dec. 31 to comply. \"We have received authorisation from the government,\" a spokeswoman for ADIB said on Thursday. The Qatar Financial Centre Regulatory Authority (QFCRA) said in a statement that the authorisation will allow the bank to carry on regulated activities in relation to deposit taking, providing and arranging financing facilities and managing investments. \"The easiest way for foreign banks to get into Qatar is to get a QFC licence,\" said Mahin Dissanayake, director at Fitch Ratings. \"But there are restrictions to what they can do. With ADIB they are really only allowed to do wholesale banking so that shouldn\'t change the competitive environment for Qatar drastically.\" Analysts said that the central bank edict will benefit local Islamic institutions, such as Qatar Islamic Bank and Masraf Al Rayan , who stand to capture the Islamic liquidity that will suddenly flood the market.But there may also be room for foreign players to try to grab some of the business, said Jaap Meijer, senior analyst at AlembicHC. \"While we feel that most of the Islamic market will go to local banks there might be some interest in foreign banks,\" he said. \"They could attract a couple of percentage [points of market share]. For some foreign banks that might be enough to start with.\" Islamic banking growth is expected to be stronger in Qatar, analysts say, which would draw the attention of regional players if the government grants licences. \"Qatar is seen as an attractive market by most players in the region,\" said Ibrahim Masood, senior investment officer at Mashreq bank. \"The growth in banking is strong in the Islamic space so I would not be surprised to see standalone Islamic banks being more aggressive.\" But there is no guarantee that Qatar will be as open to letting outsiders take market share that could be the preserve of local Islamic banks. Some bankers have said that the central bank\'s decision to ban conventional banks from having Islamic operations is a deliberate move to boost Qatari Islamic banks. Firms such as Qatar Islamic Bank, for instance, could add 35 percent to its loan book if it captures even 50 percent of the Islamic assets expected to flood the market following the central bank\'s decision, Meijer said. Allowing too many foreign players could cut into the profits of homegrown Islamic institutions, said one Qatar-based banker, adding that conventional banks with Islamic branches have not even been able to apply for licences to create standalone entities. \"There\'s a general feeling that QCB bowed, in part, to pressure from Islamic banks in Qatar to shut out excess competition,\" he said. \"Allowing a number of foreign Islamic banks to come in may not make sense from that perspective.\" No one at the Central Bank was immediately available for comment. From / Arabian Business News

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Arab Today, arab today uae’s adib gets green light to operate in qatar Arab Today, arab today uae’s adib gets green light to operate in qatar

 



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