Islamic Finance News
Page 1 of 1
10-Apr-2013
Volume10.Issue14
IFN Reports
Big numbers for a small country
Amjad Hussain
This last month has seen continued activity and good news coming out from the Islamic
finance industry players in Qatar. Qatar continues to place itself in the center of activity of the
industry in the region and globally.
QInvest recently announced the launch of the QInvest Managed Account Platform (QMAP), which is
the world’s first Shariah compliant managed account platform. QMAP will be managing a minimum of
30 Islamic funds over the next three years, which will allow shareholders and investors to invest in
asset classes such as mutual funds and hedge funds, managed by globally recogonized investment
managers.
We understand that things are still moving on course for Qatar International Islamic Bank (QIIB) to
launch a Sukuk program with a value of up to US$2 billion by year-end. The specifications of the
tranches are yet to be determined but we understand that the planning around this will be moving
forward imminently.
Whilst Barwa Real Estate Company recorded a 17.6% decline in net profits for 2012, Barwa Bank
recorded a staggering 41% increase in net income as at the end of 2012. The financing portfolio for
Barwa Bank has increased by 66% to QAR15.3 billion (US$4.2 billion). Barwa Bank’s continuing
success has set the expectation high for its Sukuk trading platform, which the bank expects to become
fully-fledged by the end of 2013. The bank anticipates taking advantage of the opportunities within
Qatar, where Islamic banking assets have experienced significant growth and are expected to
continue this trend.
Qatar’s Islamic banking assets are estimated to have grown by more than 23% during the last year,
reaching QAR195 billion (US$53.55 billion). This represents a 9.8% growth since 2002. Deposits in
Islamic banking now equate 26.6% of the total banking sector in Qatar, reaching QAR121.6 billion
(US$33.39 billion). Qatar has outgrown the Gulf banking industry by a staggering 14%, and the
country now ranks as the fastest growing country for Islamic banking assets in 2012, according to the
Ernst & Young Islamic Banking Center.
The minister of finance and economy recently announced that the Qatari government intends to
increase its’ spending by 18% to QAR210.6 billion (US$57.84 billion) in the 2013-14 fiscal year. The
Qatari government has also confirmed its commitment to set up an Islamic bank with a minimum paid
up capital of US$1 billion, in collaboration with the IDB and Saudi Arabia-based Dallah Albaraka
Group.
The setting up of a mega Islamic bank in Qatar could potentially increase the country’s global
presence and mark Qatar as a major global platform for Islamic finance. Qatar has the resources, the
expertise in Shariah compliant products and services, as well as a world class regulatory framework.
For example, apart from Turkey, Qatar is the only country in the region that has implemented a
specific tax regime for Islamic transactions. Plans to establish Qatar as a global and a regional hub for
Islamic finance have the potential to increase cross-border activity, and allow the country to diversify
its GDP growth in sectors other than oil and gas.
Amjad Hussain is a partner at law firm K&L Gates’ corporate and finance practices. He can be
contacted at Amjad.Hussain@klgates.com .
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09/04/2013