Stanchart Joins Race for Islamic Banking

STANDARD Chartered yesterday joined the growing list of banks hoping to cash in on the growing market for Islamic banking in Kenya. The bank projects the share of Islamic banking in the local 43-company industry to grow to 15 per cent from the present two per cent in the next 10 to 15 years, reports All Africa Global Media.

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The bank backed the "revolutionary regulatory approach" taken by the Central Bank to encourage launch of more Shariah compliant products. The Asian and Middle East focused lender yesterday unveiled an Islamic banking window, Saadiq, in its Kenyan operations--the first in its 14 African markets.

The Nairobi operations will act as benchmark for similar launches in neighbouring Uganda, Tanzania and populous Nigeria over the next two years.

Islamic banking has been taking root since 2007 with the licensing of two fully fledged, privately owned lenders--First Community and Gulf African banks. The two banks controlled 1.02 per cent of the banking industry assets, 1.15 per cent of deposits and 1.14 per cent of loans in 2013, according to data from the Central Bank.

Medium tier Chase bank last month opened a fully fledged branch in Mombasa while Stanchart now joins Barclays,KCB, National bank and Dubai bank in offering Islamic banking windows in their banking halls.

The global head of Stanchart's Islamic banking--trading by brand name Saadiq - Wasim Saifi said the bank was targeting the "98 per cent of customers who are not on islamic banking because that's where the real opportunity is".

"It has taken us over two years since late 2011 to go through the regulatory requirements, the system capability, creating a proposition and understanding the market needs," the Malaysia-based Saifi said.

"We wanted to ensure that all our customer segments (SME, retail and corporate) have islamic solutions."

The bank has 20 years experience in islamic banking with "520,000 customers" mainly in Malaysia where Saadiq is headquartered, Pakistan and United Arabs Emirates.  Our advantage in Kenya is that we are the only bank that can provide seamless islamic transactions in multiple markets," Saifi said.