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Swiss Faisal Bank to Set Up in Muslim Centers - ASHARQ AL-AWSAT English Archive
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ZURICH (Reuters) – Geneva-based Faisal Private Bank wants to set up shop in Malaysia, Dubai and Saudi Arabia, luring wealthy Muslim clients on the home turf of its parent company Ithmaar Bank.

Switzerland’s first fully Islam-compliant bank combines that feature with the sound financial reputation of a Western bank under Swiss management, its chief executive told Reuters.

“We are sharia-compliant and when we became a bank we had a large increase in the number of accounts because of that fact,” Marco Rochat said in an interview.

“We have people who had cash at home, or in non-interest bearing accounts,” he said.

Devout Muslims may hesitate to put money in Western banks despite the fact that most of them offer products approved by Islamic scholars, because their business is based on charging interest, which Islam forbids.

“We do not recognize interest. When a clearing account generates interest, it does not go to the profit and loss, but I put it into a fund for charitable work,” Rochat said.

Switzerland, easily the largest destination for private wealth parked abroad, is hugely popular with Middle-Eastern clients for its stable politics, banking secrecy and deep financial know-how.

Obtaining a banking licence in 2006, Faisal Private Bank has gathered 820 million Swiss francs ($758.5 million) in client assets, a humble sum even in Switzerland’s fragmented banking landscape where hundreds of small players abound.

But this year, new offices in Dubai, Malaysia and Saudi-Arabia should bring more growth, Rochat said, with two new real estate funds adding up to 400 million francs.

Assets had long stayed stable as parent company Ithmaar Bank from Bahrain withdrew funds when Faisal started growing on its own strength, Rochat said, though Faisal’s success might now well persuade it to put more money in the unit.

The bank has so far specialized in real estate investments, but has also expanded into solar technology and is now launching a $150 million euro fund to invest in real estate projects around nursing homes in Germany.

Its ethical approach had also started to attract Western clients, Rochat said. Of Faisal’s total client base, some 90 percent were from Saudi Arabia, the United Arab Emirates, Kuwait, and Bahrain. The rest was European.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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