Bahrain Financial Official: Islamic Banks 'Should Merge'

Bahrain Monetary Agency's deputy governor told Islamic bankers Thursday that small Middle Easter banks should merge to avoid cluttering the markets. Anwar Al Sadah said that the Middle East's small Islamic banks can not compete with some of the world's

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Bahrain Monetary Agency’s deputy governor told Islamic bankers Thursday that small Middle Easter banks should merge to avoid cluttering the markets.

Anwar Al Sadah said that the Middle East’s small Islamic banks can not compete with some of the world’s largest banks and should pursue a path toward large scale mergers instead.

“If Islamic banking is to grow successfully, we do not need more small Islamic banks,” Al Sadah reportedly told attendees of a conference of Islamic bankers. “We need bigger Islamic banks that can compete successfully and handle large projects.”The need for convergence applies not just to the number and size of banks, but also to convergence of procedures and practices.”

Other high-profile Middle Eastern officials have offered their support of Al Sadah’s sentiments recently, with former Egyptian prime minister Abdul Aziz Hijazi saying that smaller banks have no real impact on global markets global market, but a consolidated Islamic bank could be among the top 100 banks in the world and in turn, a powerful force among large-scale investors.

Islamic banking has seen been undergoing a rapid increase in international interest recently, causing a number of banks in the Middle East and in Europe to adopt banking products that comply with Shariah law.

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