Qatar is set to become a "key international distribution hub" for Shariah-compliant products as the Islamic finance market continues to emerge, a new report has shown.

While infrastructure projects will feed new alternative fund structures and boost public-private partnerships, Qatar also has a long-term interest in developing as a centre for Islamic finance, said Qatar Financial Centre Authority in its first 'Mena Asset Management Barometer'.

Saudi Arabia has left the International Islamic Liquidity Management Corp (IILM), which is preparing to launch its first long-delayed sukuk or Islamic bonds since its inception in 2010, the IILM said late on Wednesday.

IILM did not give a reason for Saudi Arabia's exit. The central banks of Qatar and Malaysia bought out Saudi Arabia's share.

Regulators, scholars and simple economics are pressing Islamic banks in the Gulf to diversify their money market transactions, a trend which could spur growth of the region's financial markets.

Islamic money market assets have expanded rapidly in the last few years along with the rise of sharia-compliant banking.

The GCC’s banking industry saw single digit growth in both revenue and profit last year as it continued to vastly outperform its international peers.

A study by Boston Consulting Group (BCG) showed revenue at Middle East banks grew by 6.9 per cent on 2011 while profits increased by 8.1 per cent, largely due to an increase from extraordinary income sources.

An extraordinary general meeting (EGM) of Qatari bank Masraf Al Rayan has approved a plan to acquire a shareholding in a Libyan commercial bank, the North Africa Post reports.

The meeting also empowered the board of directors to take decisions concerning urgent business and company acquisitions up to a total cost of QR1bn for two years from the date of this approval.

Banks in the Gulf region are set to see a gradual improvement in profitability on rising fee income and lower impairment charges, Fitch Ratings has said in a new report.

The rating agency said the outlook for most banks in the GCC/Middle East region was stable, largely driven by the probability of sovereign support.

Egyptian Finance Minister Hegazy claims 'Islamic' bonds could substantially reduce Egypt's budget deficit and welcomes Qatar's economic aid.

The new Islamic Bonds (Sukuk) law is expected to generate $10 billion for the Egyptian government, Finance Minister El-Morsi Hegazy was quoted as saying on Sunday.

HSBC’s decision this year to stop offering Islamic products in many of its markets has sent shock waves through the Gulf region, one of the global hubs for Islamic finance.

The move underscored the difficulties facing even the largest conventional lenders that have tried to lure new customers to bank in compliance with Muslim sharia law.

Qatar has issued Islamic bonds (sukuks) worth a staggering $25bn this year, with more than 50 per cent of the subscribers representing conventional institutions -- a development that indicates increasing investor confidence in Shariah-compliant investment avenues worldwide, a conference on Islamic banking and finance was told

International Islamic Liquidity Management Corp., backed by a group of central banks located mainly in Asia and the Middle East, will launch its first sukuk of $300 million to $500 million "in a matter of months", its chief executive said.

Kuala Lumpur-headquartered IILM, established last year, aims to issue short term sukuk, or Islamic bonds, to help sharia-compliant banks manage liquidity and create a liquid cross-border market for Islamic instruments.