Following the success of the First Islamic Retail Banking Conference 2004  earlier this year, Islamic Conferences Group & Failaka International Inc. are pleased to present the second instalment of this annual series ‘Islamic Retail Banking Conference II (IRBC II)’. ICG are proud to announce the 2nd International Islamic Retail Banking Conference, Exhibition and Islamic Banking Industry awards to be  jointly presented by ICG and the Banker Middles East scheduled for the 14th -15th of November 2005 at the Grand Hyatt Dubai.

Dr Karbash Minister of Finance and Chairman of Dubai Islamic bank in his inaugural address at the First Islamic Retail Banking Conference (FIRBC) held in March of 2004 at the Grand Hyatt in Dubai commended the increased global momentum and interest in Islamic products in the banking sector.

Citing the examples of Citibank, Credit Suisse First Boston, Deutsche Bank, Freddie Mac and HSBC which had added Islamic products and services to their portfolio, Dr. Kharbash also noted that the UAE's commercial banking sector has seen a strong trend towards the conversion of conventional banks into Islamic ones.

Dr. Khirbash went on to say that;

'Islamic finance has proven its competence and can grow to be a powerful force for good in our    own societies and beyond. For an industry that is still considered something of a newcomer, in the past three decades, we have seen a very impressive dynamic. Retail managers at banks both here in the UAE and globally have an opportunity and a responsibility to provide the marketplace with the products and services consumers require'

Dr. Khirbash concluded his address by noting that as the UAE was host to the world's first Islamic bank,  hosting of the first ever Islamic Retail Banking Conference in Dubai reflected the UAE's growing role and contribution to the industry.

Since Dr. Khirbash perceptive comments and close of the immensely successful First Islamic Retail Banking conference,  the Islamic retail finance industry  has grown from strength to strength achieving significant milestones in both Muslim and Western markets.

Interaction with and the entry of western and conventional financial institutions to the sector has also heightened the debate with some observers suggesting that western conventional and arab banks with Islamic windows are more aggressive and bring extensive experience of marketing, big balance sheets and innovation. Factors that it is suggested will enable them to outpace Islamic banks in developing both their retail and commercial business.

The verdict as to who will be the victors or that this contention is accurate is still out however.  What is apparent is that inter action and indeed competition between conventional and Islamic financial institutions can only be a good thing for the development of the sector which globally has been making significant inroads and attracting unprecedented attention and media attention.

In Asia, the Middle East and Europe, more and more banks and their customers are turning to Islamic finance - and a growing number of the decisions to do so are now made on commercial rather than religious grounds.

As a result, the sector has moved from being a banking backwater only a decade ago into what some senior bankers say is now the fastest-growing financial sector in the world...

There is enormous potential for further growth in the Muslim market of 1.3 billion people. Private assets held in the Middle East alone are estimated at more than $750 billion. With many more people eager to have their financial affairs conducted in line with Sharia law, this expansion is expected to continue. But the real change is that non-Muslims are starting to use Islamic finance...

In Asia, there is a similar high demand from non-Muslims. According to one banker, more than 60 percent of his institution's Islamic banking customers are Chinese.

Islamic bankers are convinced that this trend will continue...

The rising interest in Islamic finance around the world has led to a major expansion in the number of institutions offering these services - not only those operating at the local and regional level, but also the world's leading banks. International regulators have also taken a much more sympathetic stance toward the sector.

Global financial institutions, led by HSBC, Citigroup, Deutsche Bank and BNP Paribas, are now setting up either Islamic divisions or separate banks. Most important, they are contributing the expertise needed to establish some of the extremely sophisticated products now available.

Wider authorization

Equally important is that more jurisdictions are now permitting Islamic finance. In a number of countries, institutions are converting from conventional practices to being Sharia-compliant.

Kuwait, which until this year had permitted only one Islamic institution, the Kuwait Finance House, has now relaxed its rules. Already, a new institution, Boubyan Bank, has been set up, and  the Kuwait Retail Estate Bank is becoming an Islamic institution.

The United Arab Emirates, where the sector was dominated for years by two institutions, the Abu   Dhabi Islamic Bank and Dubai Islamic Bank, is now becoming more competitive.

Banks like the Dubai-based Emirates Bank International, hitherto a conventional institution, are setting up Islamic divisions. EBI has also established a bank in Sudan, where the entire financial sector is required to be Islamic. The National Bank of Sharjah has changed from being a conventional to an Islamic bank.

There is real change, too, in Saudi Arabia, where there is much greater readiness by the regulatory authorities to encourage Islamic banking. Al Rajhi Bank has for many years had a virtual monopoly on Islamic finance in the kingdom. But one of the smaller banks, Al Jazira, is becoming fully Sharia-compliant. The largest bank, National Commercial Bank, is finding its new business so dominated by demand for Islamic products that many predict it will be fully converted within five years. Another important development has been the creation of the new bank Al Bilad, which will focus on developing retail products.

All the other banks in the kingdom are now offering a full range of Islamic products and services      along with their commercial side. They report that the majority of their customers are demanding Islamic products. The expansion also applies in some of the smaller Gulf states, such as Qatar, now one of the wealthiest countries in the region thanks to its extensive gas reserves. Both Qatar Islamic Bank, which has taken a stake in a bank in Malaysia, and Qatar International Islamic Bank, which has a holding in Britain's first Sharia-compliant institution, the Islamic Bank of Britain, have produced excellent results.

The market has also been expanding in Asia, where Kuala Lumpur is the main center for Islamic financial activity. In response to the growing market there and the decision of Bank Negara to relax some of its restrictions on foreign banks, Kuwait Finance House and Al Rajhi are among the Arab institutions looking to do business in the region - particularly in mainland China.

Published by International Herald Tribune

Islamic financing has not only expanded in Muslim countries, but non-Islamic banks are now issuing Sukuk and mortgages.

The heightened focus on Islamic financing recently has many aspects. And it is not just retail markets in Saudi Arabia, for example, that have swung across to Islamic products from conventional banking products.

While growing slowly since its initial resurgence in the 1970s, Islamic banking has witnessed unprecedented growth in the past three years not only from devout Muslims but also from wholesale and retail markets across the Western world.

Islamic financing is no longer a niche product for particular minority interests, it  is well   on its way to achieving critical mass and can now perform a global role. Last year, the global issuance of Sukuk (Islamic investment certificates) reached $6.7bn, almost five times that of 2003. And besides Bahrain, Malaysia and Qatar, Sukuk issuance has also come from unexpected sources such as the German state of Saxony Anhalt, which has issued a $120m Sukuk...

On the retail side, the UK’s Financial Services Authority (FSA) has, after considerable effort, taken the plunge and authorised the UK’s first Islamic bank, the Islamic Bank of Britain.  And at least two British banks, HSBC and Lloyds, are now offering Islamic mortgages. More will follow.

Published by The Banker

Dramatic growth in the demand for Islamic financial services is prompting providers to offer ever more sophisticated products. It has also caught the eye of the global banking giants.

Published by The Global Investor

On the retail side, conventional banks in the UK are increasing Islamic offerings. Islamically structured mortgages were the key product, but offerings now include consumer finance, savings products, credit cards and insurance. While financial headlines are dominated by the big-ticket investment banking deals, institutions are realising that the retail side could have the greatest potential...

Published by The Lawyer.com

These are just a few samples charting the interest in the growth and undoubted potential of the Islamic Retail financial services industry. The 2^nd International Retail banking conference aims to address these issues as well as expand the debate and identify the key factors  and opportunities driving the rapid growth of this increasingly important sector. The focused and theme based nature of IC Group conferences  provides a conducive setting that facilitates the sharing of knowledge, identification of current opportunities and future trends complemented by targeted networking and business development opportunities.  

For those of you that joined us last year at the inaugural event we hope that you will join us again this year. For those you actively engaged in Islamic finance, conventional finance and who are interested in accessing this lucrative sector we look forward to welcoming you to the 2^nd International Retail Banking Conference II.