Qatar Says $1bn Islamic Bank To Be Set Up “Soon”

Qatar expects to go ahead soon with its plan to establish a big, international Islamic bank, Finance Minister Youssef Kamal said on Monday.

Last April the Qatari government signed a memorandum of understanding with the Jeddah-based Islamic Development Bank, a multilateral lender, and Saudi Arabia’s Dallah Albaraka Group to establish a bank with initial capital of $1 billion.

Asked on Monday when the bank would be set up, Kamal replied: “Soon.” He did not elaborate on the timing, ownership or other aspects of the new institution.

A scarcity of very large, cross-border Islamic banks, which could spread ground-breaking products and best practices around the Gulf and the world, is seen by many analysts as holding back the growth of Islamic finance.

Islamic banks control about a quarter of the banking market in the Gulf Cooperation Council but their average asset base is a third the size of conventional banks, according to a study last year by consultants Ernst & Young.