Turkey’s Kuveyt to open first Islamic bank

Turkey’s Bank Kuveyt Turk has drawn up plans to open the first Islamic bank in Germany. An official at Kuveyt Turk’s German branch confirmed that the bank was preparing its application for official approval. “We haven’t issued a statement on that because we’re not in a position to while the licence is being worked on. We will release a statement only when we get the licence,” said the official. The bank is reportedly set to file its request to the German financial regulatory authority, BaFin, in October. The new bank would be based in Frankfurt plans to open further branches in cities with large Muslim populations such as Berlin. Germany has a Muslim population of around 4 million - the largest in Europe - with an estimated wealth in excess of EUR 35 billion ($31.3 billion). The German potential is huge for the Islamic finance world because the growth rate of the population is high as well as being young. Three quarters of the Muslim population in Germany is below the age of 49. In addition, estimates show that the Muslim population in Germany has a much higher saving ratio of 18 per cent compared to 10 per cent for the country as a whole. More importantly, a survey in 2010 showed that 72 per cent of Muslims living in Germany are interested in Islamic financial products. The survey found that if such products were to be offered in Germany 60 per cent of respondents would consider an investment. An amasing 94 per cent of them stated that they would purchase such products if offered by an Islamic financial institution. In the case of the Islamic insurance sector it is estimated to be worth more than €1 billion ($1.4 billion). Studies show not only is the retail component lucrative but so is the corporate sector. Muslim entrepreneurs generated more than €50 billion ($73.3 billion) in profits last year and this is an ideal market for the launch of Shari’ah-compliant corporate products. From gulftoday