May 15 2011
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Sudan's Bank of Khartoum eyes up Kenya
Kenya is in the process of changing its finance laws to allow Islamic finance. With two Shari'ah compliant banks in operation, a Takaful company and an array of Shari'ah compliant banking products in conventional banks Kenya leads the way in terms of regional Islamic finance. Kenya has also reformed its capital markets laws to allow the issuance of Sukuk.
"Our expansion into Kenya is being planned for the medium term," Fadi Salim al-Faqih, GM of BOK told The Islamic Globe.
BOK was privatized in 2002 and is now majority -owned by the UAE's Dubai Islamic Bank which has held 60% of its shares since 2005. The move into Kenya is seen in the light of plans by DIB to tap into emerging opportunities in Islamic finance across a number of sub-Saharan Africa countries.
"Muslim customers in Africa have shown a strong preference for the Islamic 'brand', even paying a premium for the products offered by Islamic banks. The regional industry has shown double digit growth rates although from a relatively low absolute base," said Khalid Howladar, head of Islamic Financial Institutions at Moody's.
He said this growth offers a new challenge to the respective central banks to ensure they are well prepared to regulate Islamic financial institutions if new to the country.
The announcement from BOK came days after the US Department of the Treasury's Office of Foreign Assets Control (OFAC) removed the bank from a blacklist of Sudanese entities and individuals subject to economic sanctions since 1997 because of the country's alleged financing of terrorism.
Al-Faqih said the delisting will have a positive impact on the business of the bank. "It will make our correspondent relationships even stronger and enable the bank to engage in various types of transaction with license from OFAC."
© The Islamic Globe 2011
© Copyright Zawya. All Rights Reserved.
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