While customers are making a run on the banks in most western countries, Islamic banks are seeing a resurgence in customers and this may result in a strong banking sector, along with subsequent exchange traded funds (ETFs), in the Middle East.
In United Arab Emirates, the Emirates Islamic Bank total assets increased by 56% to $7.1 billion from the end of December 2007 to 2008, reports Suzan Barhoush for Zawya. Customer accounts grew by 60% to $6.5 billion, or a $2.4 billion increase from the end of 2007.
The Bank also announced a record net profit of $109 million for 2008, or a 68% increase compared to the the previous year, and total income grew to $408 million, a growth of 56%. Return on capital reached 43% for 2008.
The new programs initiated by the Bank are what catapulted their growth. One key initiative in 2008 was the launch of “Skywards Emirates Islamic Bank credit cards” that catered to frequent travelers. The Bank, along with other Gulf and Arab financial institutions, created a “First Energy Bank.” They were also able to get the accounts of a number of successful, and lucrative, funds.
- Market Vector Gulf States (MES): up 8.6% in the last month; down 26.9% in the last three months; holdings of 16.3% in United Arab Emirates; sector breakdown of 44.2% in banks
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