First Major Report Into Islamic Banking Competitiveness Launched
The world’s first comprehensive report into the competitiveness of the Islamic
banking sector was launched last weekend in Bahrain.
The World Islamic Banking Conference Competitiveness report compared 10 Islamic
banks from around the world, identifying areas in which financial performance can
be improved. According to the report, the most profitable Islamic Banking institution based
on equity returns was the Saudi-based Al Rajhi Banking and Investment Corporation,
which averaged a 25% return between 2000 and 2003. Kuwait Finance House and First Islamic Bank, based in Bahrain, produced the
next best returns with 22% and 19% respectively. However, in terms of return on total assets, First Islamic was found to be
the best performer, returning an average of 7.8% for the years 2000 to 2003.
This put the institution significantly ahead of its nearest rivals, Al Rahji
and Kuwait Finance House, returning an average 3% and 2.2% respectively. The WIBC report also compared the banks on a number of other factors such as
asset turnover, expense coverage, efficiency and capital adequacy. Other banks covered in the WIBC report included Abu Dhabi Islamic Bank,
Bahrain-based Al Baraka Islamic Bank, Bank Islam Malaysia Berhad, Dubai Islamic
Bank, Jordan Islamic Bank, Qatar Islamic Bank and Bahrain-based Shamil Bank. According to WIBC executive director, David McLean, these particular banks were selected for the study
as they represented a reasonably-weighted representation of the international
banking industry, and had made public the records needed for the report. A comprehensive report in our Intelligence Report series examining offshore investment, offshore stock exchanges, and hedge funds is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report9.asp
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