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Tuesday, 5 February 2008

HSBC sees Saudi driving Islamic finance revenue


By James Cordahi

DUBAI (Reuters) - HSBC Holdings Plc expects revenue at its Islamic unit to grow at least 60 percent a year for the foreseeable future, led by its business in Saudi Arabia, the Gulf and Malaysia.
"We have been growing at 60, 70 percent plus, CAGR, over the last three years, and we fundamentally don't see that slowing anytime soon," Asif Mumtaz, Middle East head of HSBC Amanah, told the Reuters Islamic Finance Summit in Dubai. He declined to be more specific.
Almost all new consumer finance business at its Saudi affiliate, SABB 1060.SE, is sharia-compliant, Mumtaz said. "In three to five years, it may be not too far away for the rest of the GCC (Gulf Cooperation Council) as well," Mumtaz said.
The GCC clubs Saudi Arabia, the United Arab Emirates and four other Gulf oil producers into a loose economic and political bloc.
Saudi Arabia, where it owns 40 percent of SABB, is HSBC's largest Islamic finance market, Mumtaz said.
In Malaysia, where about 55 percent of the country's 27 million people are Muslim, HSBC plans to use its license to expand its Islamic financial services, especially for individuals, Mumtaz said.
"The Islamic finance industry is going to be huge in the next five to 10 years," he said.
Islamic insurance services, or takaful, will grow particularly quickly as the industry is underdeveloped, he said. Revenue from institutional business, such as arranging the sale of Islamic bonds, is also growing, Mumtaz said.
(Editing by Will Waterman)

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