Largest Commercial Bank in Central, Eastern Europe Eyes Islamic Finance Expansion
It is the largest commercial bank in Russia, Central and Eastern Europe.
“It will become a center for raising investment from that region and will work on structuring products in two areas: Islamic and non-Islamic finance,” said Oleg Ganeev, deputy chairman of the executive board of Sberbank, in an interview with Arabian Business.
Sberbank is targeting Russian businesses and investors across the region, looking to promote investment activity in both conventional and Islamic finance through cooperation with funds, financial institutions and other bodies in the Middle East.
“Opening the office in Abu Dhabi will help us get closer to investors. The office is already open and is building up its operational potential in the region. By its very nature, this is a unique office for Sber, as it has two types of operating license – for traditional and Islamic financial activities,” he added.
The Islamic window within Sber Investment Middle East, SIME, will be a single product development centre and the office for Sber’s Shariah-compliant finance business.
Sberbank’s Abu Dhabi office will carry out key activities, including structuring of transactions, attraction of investment, and assistance to Russian companies entering Middle Eastern markets.
Islamic banking has grown in popularity in the UAE since 2015, from 47 percent to 60 percent this year, according to The Islamic Banking Index by Emirates Islamic.
“One of the areas of Islamic finance that we are looking at is diversification of direct investment in various sectors of the country’s economy. Russian markets are currently attractive to international investors in terms of yield and their high levels of liquidity,” Ganeev said.
“Islamic finance will also enable investors following Sharia principles to consider the Russian market alongside Western and Asian markets, including as an opportunity to diversify investment initiatives,” he added.
Over the past year, Sberbank continued to record sustained growth in its Islamic banking offering, in which Ganeev said: “The current positions and activities of Russian exporters on the international markets have opened up new opportunities for Sber to service these kinds of transactions.”
“It’s common knowledge that there is strong demand on the international markets for Russia’s commodity exports and that Arab countries are amongst the active buyers of Russian products, including agricultural products,” he added.
Islamic banks now command roughly a 25 percent share of the banking market in the six countries of the (Persian) Gulf Cooperation Council, according to an estimate by Ernst & Young.
Source: arabianbusiness.com
