Islamic banking and finance

Turkish lender Kuveyt Türk said on March 22 it would launch Germany?s first full-fledged Islamic bank in July, a first step intended at offering sharia-compliant retail banking services across the continent.

Turkey's third-largest state-run bank Vak?fbank received regulatory approval yesterday from banking watchdog BDDK to establish an Islamic banking division, the Official Gazette has announced.

The bank will need to own a capital of $300 million.

With the approval, the bank has nine months to establish its banking unit according to Turkish law.

The Islamic Corporation for the Development of the Private Sector (ICD), the private sector arm of the Islamic Development Bank Group (IDB), has consolidated its support of Islamic finance in the Central Asian region by signing a new agreement with leading Azerbaijani microfinance institution VisionFund AzerCredit (VF AzerCredit).

Islamic banking is growing faster than its conventional counterpart but is focused in a few core markets and risks missing an opportunity to build a global footprint, the EY consultancy said in a report Dec. 2.

Three Turkish state-run banks plan to launch Islamic units, widening the reach of interest-free finance in the majority Muslim nation, but the government is treading a fine line between promoting the sector and hurting incumbents.

Turkey is pushing ahead with plans for Halkbank, Ziraat Bank and Vakıfbank to set up stand-alone Islamic banks, known locally as participation banks.

Turkey’s Bank Asya reported a net loss in the third quarter partly due to a rise in bad loans, but said it was hopeful of a turnaround following the political turmoil that has surrounded it this year.

The Islamic bank made a 301 million Turkish Lira ($133 million) net loss after a 60 million lira profit a year earlier.