Reuters Summit-UPDATE 1-Some Gulf sharia banks seen at peril
- , Tuesday October 14 2008
(For other news from the Reuters Wealth Management Summit, click on http://www.reuters.com/summit/WealthManagement08?pid=500)
By Liau Y-Sing and Saeed Azhar
SINGAPORE, Oct 14 (Reuters) – Some Gulf Islamic banks could fail as frozen credit markets and slumping property prices take a toll, but government aid should save the industry from a prolonged slowdown, a leading sharia lender said on Tuesday.
Islamic banks have hardly felt the chill of the credit crisis so far, but some industry experts warn that the $1 trillion industry will not be spared from the fallout as prices of commodities, property and oil slide. All are core drivers of the Islamic financing sector.
Sharia lenders in the Gulf would be harder hit by the credit rout than Asian banks due to their greater direct exposure to the property market, said Badlisyah Abdul Ghani, chief executive of Malaysia’s CIMB Islamic Bank.
CIMB Islamic is the world’s top arranger of sharia bonds. The lender is part of CIMB Group, which is listed on the Malaysian stock exchange through Bumiputra-Commerce Holdings .
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