Dubai’s Noor Bank Eyes Turkish Growth To Beat Competition

Dubai-based Noor Bank is looking to Turkey and other international markets to escape tougher competition at home and take advantage of a booming global sharia-compliant finance industry, its chief executive told Reuters on Tuesday.

Banks in the United Arab Emirates have been expanding heavily abroad, as fierce rivalry among 51 lenders battling for a share of the domestic market drives down profits.

Emirates NBD bought the Egyptian operations of BNP Paribas in 2013. National Bank of Abu Dhabi and First Gulf Bank have been opening offices in Asia, while Mashreq is scouting Egypt and Turkey for possible acquisition targets.

Unlike other Emirati lenders eyeing expansion overseas, unlisted Noor does not plan to open any foreign branches — but it will offer additional services and products, expanding on its Turkish experience, Hussain al-Qemzi told Reuters in an emailed response to questions.

Qemzi said the bank would provide more offerings in Islamic trade finance and loan syndication in particular.

“To do this, we are actively looking at opportunities in the Gulf, Turkey, south Asia and selected African countries.”

Turkey is a particular focus for Noor, Qemzi said, as the bank has already arranged syndications for Turkish borrowers worth more than $4.5 billion since 2010, including more than $2.1 billion in the past 18 months.

Banks from the Gulf region have been jockeying for a slice of the growing financial sector in Turkey, the world’s 16th largest economy. Kuwait’s Burgan Bank acquired the Turkish arm of Greece’s EFG Eurobank in 2012, while Commercial Bank of Qatar has a majority stake in Alternatifbank.

The majority of Turkey’s more than 76 million population is Muslim, but they are underserved by a still nascent Islamic banking sector — Islamic banks hold a combined 5.7 per cent of total banking assets.

Globally over the last several years, Islamic banks have grown faster than conventional lenders, partly because of economic booms in the core regions for Islamic finance: the Gulf and southeast Asia.

Among Noor’s shareholders are state-owned funds Investment Corporation of Dubai and Dubai Holding, who both have 25 per cent stakes.