| March 19
March 19 Standard Chartered has
launched Islamic banking services in Kenya, the first foray of
its "Saadiq" brand into Africa, and it will use Kenya as a
testbed for expanding the brand across the continent, a bank
executive told Reuters.
The move comes after Kenya proposed a separate regulatory
framework for Islamic finance, part of a broader strategy
designed to boost capital markets in east Africa's biggest
"Our experience and success in this market will certainly
determine our future strategy for the rest of Africa," said
Wasim Saifi, the bank's global head of Islamic consumer banking.
"I would expect the next two to three years to be focused on
building the Kenya business before we evaluate other markets in
east and west Africa."
Standard Chartered will offer its full range of
sharia-compliant products in a market currently served by two
full-fledged Islamic banks and the Islamic windows of a handful
of conventional banks.
The lender, which makes 90 percent of its profit in Asia,
the Middle East and Africa, will use its existing 28-branch
network in Kenya; selected locations in Nairobi and Mombasa will
have dedicated Islamic windows, Saifi added.
Standard Chartered will roll out products covering current
and savings accounts, mortgages and auto finance, as well as
trade and term finance.
Islamic finance, which follows religious principles such as
bans on interest payments, accounts for roughly 2 percent of
total banking business in Kenya, where Muslims make up about 15
percent of the population of 40 million.
Standard Chartered, however, hopes to attract a broader
"We are not looking to target market share from the 1.5 to 2
percent share that Islamic banking has today, but to target the
98 percent that currently is not with Islamic banking."
The development of a specific regulatory framework for the
industry would provide a platform for growth; this has been
observed in countries such as Malaysia and Pakistan, Saifi said.
"Similarly in Kenya, as the industry develops, we will
expect to see the regulatory framework also expand and refine to
enable this development."
Earlier this month, Standard Chartered said it expected
income and profits to remain "challenged" in the first half of
this year after the bank reported its first drop in annual
profits for a decade.
Kenya is attracting interest from at least one other Islamic
bank; Dubai Islamic Bank's chief executive told
Reuters this month that it planned to expand operations into
(Editing by Andrew Torchia)