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QIB Could Scoop Up Islamic Assets of Conventional Banks

Qatar : 10 February 2011

There is a possibility that the Qatar Islamic Bank will scoop up the Islamic banking units belonging to the convention banks within Qatar after those banks are being forced to close down their Islamic banking services, according to a top executive.

The central bank in Qatar announced that conventional banks must close off any Islamic banking services by the end of December, due to concerns of overlap between the two groups. This move surprised many and gave the Islamic lender shares a boost.

There were no hints given as to whether or not banks have the option to apply for licenses separately allowing them to offer Islamic banking. Analysts have warned that the conventional banking firms might need to offload the Islamic assets.

The acting CEO of QIB, Ahmed Meshari, spoke to Reuters about his bank’s interest in those assets and made the prediction that as many as 100,000 existing customers within Qatar could move over to Islamic banking institutions in response to this directive from the central bank.

Meshari noted that QIB forecasts their business growth will be around 10 percent as a result of the order. QIB is currently the second largest lending institution in the nation.

Analysts forecast that it will be the Qatar National Bank (QNB) that feels that most impact of this decision that forces the closure of its Islamic banking operations. Currently Islamic banking represents 11.6 percent of the total assets of QNB.

In the Doha bourse earlier today shares for QIB were trading at a level 1.9 percent down.

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