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Tuesday, 19 February 2008

Italy's first Islamic bank will open before the end of this year

MANAMA: Italy's first Islamic bank will open before the end of this year, it was revealed at a high-profile meeting between Italian and Gulf bankers. Work is already underway on a 100 million euros ($147m) institution, Union of Arab Banks (UAB) chairman Adnan Yousif told delegates at the opening of the three-day Italo-Arab Finance and Banking Dialogue at the Novotel Hotel.
Mr Yousif said the bank could be part of the existing London-headquartered European Islamic Investment Bank (EIIB) and its shareholders would be Middle Eastern banks.
"It will happen this year, we are working on the study now," he said.
He was talking on the sidelines of the event, which welcomed representatives of banks responsible for 75 per cent of the assets of Italy's banking system to Bahrain in a bid to build closer ties.
Italian Banking Association general manager Giuseppe Zadra said that in order for Islamic banking to take hold in Italy the public would have to be educated about the industry and that customers are likely to be Muslim to begin with.
"To ask people to enter into a world of which they don't know anything would be difficult, so we probably have to start as they did in the UK, with the Muslim communities, which are quite vast.
"The retail business is something which has to grow in the people who are in this community - and we have a lot of potential customers because Italy has two or three million workers from North Africa."
Italy accounts for roughly 12 per cent of both the population and GDP of the EU but there are currently no Italian banks operating in Bahrain.
"It is a matter of fact in Europe and the Western countries in general there is a lack of understanding about Islamic banking," UAB European adviser Hatem Abou Said said.
However, Mr Zadra said now that Italy's banking system had completed a 15-year effort to cut the percentage of its assets held by the government from 70 to just 1pc Italian banks are ready to do business in the Gulf.
"We have spent the last 15 years on a total restructuring of our system and if you go back to the early nineties when this began the Gulf area was not as interesting to investors as it is now, so we are arriving having put our house in order," he said.
"We have an interest in trade financing because the exports of Italy to this region are growing very, very fast so we are interested in supporting Italian companies investing here," he said.
"Today we have the perfect opportunity to form partnerships and bring the Arab cash flows into the Italian market," Mr Yousif added. --(GDN)
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