Islamic Finance news understands that the long-awaited megabank, touted by Saudi businessman Sheikh Saleh Kamel of the Al Baraka Banking Group, will likely be set up in Qatar by the end of this year, following initial expectations that the bank would be established in Bahrain or Malaysia.
Qatar’s possible role in the institution is a further illustration of the country’s growing financial clout; having made a number of high profile international investments recently. These include a 2% stake in France oil and gas firm Total valued at US$2.6 billion and the sale-and-leaseback of Credit Suisse Group’s London headquarters, estimated at US$523 million.
The Credit Suisse office is located at Canary Wharf, the financial district controlled by real estate group Songbird Estates, in which Qatar Holdings owns around 28%. Qatar Holdings is the investment arm of sovereign wealth fund Qatar Investment Authority.
Meanwhile, despite Qatar’s strong financial standing, market observers caution that the country could see a liquidity squeeze to fund World Cup projects as state-owned enterprises dominate borrowing. Hence, the country may need support from international banks to provide extra credit.
However, with an Islamic megabank with a targeted capital of US$1 billion in the picture, perhaps the country can look closer to home for a helping hand.
source: Islamic Finance News