MANAMA, (Reuters) – French bank BNP Paribas said on Thursday it wants to boost revenue from Islamic finance four-fold by the end of 2011 through expanding its regional footprint and use of complex corporate banking products.
“Derivatives, swaps and hedging tools are all much needed by the industry to develop,” Jacques Tripon, global head of Islamic banking at BNP Paribas, told Reuters.
Tripon declined to disclose a target figure for growth in Islamic operations, but said the bank wants to grow Islamic operations in South East Asia and some Mediterranean countries.
Sophisticated conventional banking products are still at an early stage of development in the Islamic banking industry.
Islamic banking has grown strongly over the past years as Gulf Arab countries enjoyed a boom from high oil prices, but has recently started to feel the impact of the global credit crunch.
Islamic finance operations at large conventional banks, including BNP Paribas, are competing with a growing number of regional sharia-compliant banks.
“The industry needs consolidation, there are few banks above 1 billion dollars (in equity). But we need regional champions,” said Tripon.
Islamic banks cater to investors who want to avoid earning or paying interest, viewed by Islam as usury.