MANAMA,— “Islamic banking is the fastest growing sector in the banking industry with an estimated growth between 35 to 40 percent,” Mark Hanson, chief executive of Global Banking Corporation (GBCORP), told Arab News soon after formal inauguration of the bank in Manama on Tuesday.
He has played a leading role in numerous large equity transactions including American Standard ($200 million), Red Sea Housing Services ($140 million) and Arabian Shield Cooperative Insurance. He was also an adviser to the Deputy Governor of the Saudi Arabian Monetary Agency (SAMA) and prior to joining Global Banking Corporation, he was head of corporate finance at Saudi Hollandi Bank in Riyadh.
“With total assets in excess of $ 500 billion, the Islamic banking industry has been growing ever since Malaysia created the world’s first Islamic finance institution a mere 13 years ago,” Hanson stressed. He pointed out that from Boston to Bahrain, there are more than 350 Islamic banks that operate in more than 60 countries.” Islamic banking has broadened its appeal, he said, indicating that nearly one-quarter of all Islamic banking business is now transacted by non-Muslims.
Asia already has a settled Islamic banking industry and the continued success of financial markets of Hong Kong, China, Singapore and Malaysia offer fantastic long-term prospects for investors.” The unprecedented economic growth in Asia lies behind our decision to offer GBCORP investment products in the region.
Stressing on the vision of his newly opened bank, Hanson said:” It is this growing worldwide demand for Islamic finance that GBCORP will exploit.”
Our in-depth analysis of global financial markets and economic conditions has shown us that in addition to building successful financial relationships in the GCC countries, there is a real business need for Islamic investment banking products and services in other regions.
Hanson recalled that at a recent investors conference held in Dubai, the key theme from GCC investors was “diversification.”
This means diversification from investments not only within the Middle East, but also to Europe and Asia.
Speaking about the GBCORP ‘s operations, Hanson said, based in Bahrain, it is committed to operating throughout the GCC. “Our future horizons are fixed on other regions, of which three are of particular interest to the bank. Islamic investment in European property continues to grow, reaching nearly $35 billion in 2006. Investors are attracted by the quality of stock in key European markets, which still offer positive margins between rental yields and financing costs in major markets. These markets are well regulated and relatively stable and are expected to remain so over the medium term.”
The emerging financial markets combined with large Muslim communities in several North African countries, offer potential for GBCORP to expand its business operations in the region.
“Crucial to GBCORP ‘s success will be its management and employees. We have already recruited to senior executive positions and are now in the position to grow the bank through recruitment of a team of top quality international investment banking professionals.”
Hanson emphasized that while GBCORP’s initial business ventures will be in the GCC region, the bank’s management possesses the international banking experience necessary to grow its business through strategic alliances across the globe.
“We see Europe (with its growing demand for Islamic banking), Asia (Hong Kong/China/Singapore/Malaysia) and the Islamic countries and emerging markets of North Africa as regions where GBCORP can have significant success,” he said.
Drawing attention to GBCORP’s strategic market positioning, he said: “As strong growth in the GCC produces record economic performance, governments are looking to invest in huge real estate and construction infrastructure projects, energy, telecoms and financial services. The governments of Saudi Arabia and Qatar alone are spending billions of dollars in these sectors and are looking at appropriate ways of funding these projects.”
GBCORP will target these sectors by providing innovative ways of funding infrastructure projects.”
“The bank’s Islamic product portfolio will have a global appeal across religious boundaries and not be limited by geographic factors. All our investments will be Shariah- compliant. As an Islamic bank, we believe GBCORP should be at the forefront in shaping the growing collaboration between Shariah-compliant and other financial institutions,” Hanson added.
Investment banking in the region has now come of age. Gulf investment banks are among the leading players on the world stage, which is why GCC investment banking needs a Global Banking Corporation, he said. Hanson added that the provision of investment banking across the globe is reflected in the GBCORP logo.