Nov 03 2010
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Islamic banking - time to act! - A.T. Kearney identifies mergers and acquisitions as essential for the Islamic banking sector post crisis-
Dubai, 3 November 2010-- The global financial crisis has put an end to the heydays of growth in the banking sector and the current market outlook suggests that these days are not returning quickly. Islamic banks, which traditionally grew faster than their conventional peers, are also affected. With the room for further organic growth being limited, mergers and acquisitions should be considered as an avenue for sustained growth, says A.T. Kearney, one of the world's leading management consulting firms in the financial industry.
The global financial crisis highlighted the need for consolidation in the Islamic banking industry in the region. Growing out of their niche and becoming mainstream business is considered one of their major challenges and if Islamic banks do not succeed, the room for further organic growth is limited as the market space in some GCC countries is already overcrowded, according to A.T. Kearney.
"Some Islamic banking players are currently determining long term future plans, eyeing the opportunity to grow and become stronger players. Mergers and acquisitions offer a way to build more powerful players with better chances to compete," commented Dr. Alexander von Pock, Principal, Financial Institutions Group, A.T. Kearney Middle East.
In recent news some Central Banks in the GCC - notably Kuwait and UAE - are urging banks to consider mergers to strengthen the banking sector. This sentiment is obviously shared by a number of high-ranking regional bankers, who have either expressed interest in mergers and acquisitions to counter competition or commented on the favorable conditions for acquisitions. More importantly, the first domestic Islamic banking acquisition in the MENA region in years has recently been concluded, where an Islamic bank in Bahrain has acquired a conventional bank with the intention to convert the target into a Sharia-compliant business and Dubai Islamic Bank has increased its stake in Tamweel.
About A.T. Kearney
A.T. Kearney (www.atkearney.com) is a global management consulting firm that uses strategic insight, tailored solutions and a collaborative working style to help clients achieve sustainable results. Since 1926, we have been trusted advisors on CEO-agenda issues to the world's leading corporations across all major industries. A.T. Kearney's offices are located in major business centers in 37 countries. From our fast growing Middle East offices in Abu Dhabi, Bahrain, Dubai and Riyadh, A.T. Kearney actively contributes to the operational excellence and profitable growth of the private sector industries and services in the region as well as the agility of governments. For more information, visit www.atkearney.ae.
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