Islamic banks should diversify into areas such as asset management after real estate industry investments caused them greater losses during the credit crisis than conventional banks, according to McKinsey & Co Inc.
One third of the assets of Islamic banks in Qatar are “directly exposed in some way to real estate” compared with 15 percent for other banks, Amer Afiouni, Islamic finance associate principal at the consulting firm, said in Singapore.
“Whether on the liquidity front or work-out front, Islamic banks need to look at their profitability and risk management.”
Financial institutions worldwide either wrote-down or lost a combined $1.77 trillion as the subprime mortgage meltdown in the US sparked a global recession.
source : arabianbusiness