Luxembourg: Private investors from Gulf countries, including a royal family from the United Arab Emirates, plan to establish the first full-fledged Islamic bank headquartered in the euro zone, an executive said yesterday.
The investors aim to launch the venture, named Eurisbank, in Luxembourg during the last quarter of 2014, said Ammar Dabbour, managing partner at Excellencia Investment Management.
$80m initial capital
With initial capital of 60 million euros ($80 million), the bank would offer retail, corporate and private banking services, and would open branches in Paris, Brussels, the Netherlands and Frankfurt.
In addition to the royal family from the UAE, Eurisbank will be owned by a bank from a country in the Gulf Cooperation Council (GCC) and other private investors, said Dabbour, who declined to name them.
Excellencia, an Islamic fund manager based in Luxembourg, has been contracted with consultants Deloitte to handle all the procedures for establishing Eurisbank, he said.
The founders of the bank plan to apply for a licence in January and expect to obtain regulatory approvals by April, Dabbour told reporters at the Global Islamic Economy Summit in Dubai.
"A large untapped customer base with more than 20 million Muslims in the EU represent a significant market growth potential for Islamic Finance, and with the strong support of the European governments and regulatory authorities of the Islamic Finance Model, the unification of the regulatory framework within the European Union is a significant advantage to serve Muslim and non-Muslim communities across Europe," he added further.
Islamic finance, which bans interest payments and pure monetary speculation, has been slow to develop in Europe, but Luxembourg has successfully marketed itself as a centre for issuing and trading Islamic bonds.
Since the global financial crisis, some European governments have shown more interest in Islamic finance, partly because it could be a way to attract cash-rich funds from the Gulf and southeast Asia.
The European Central Bank (ECB) and the Malaysia-based Islamic Financial Services Board (IFSB) worked this year on a joint study on policies affecting Islamic finance in Europe. Munich-based FWU Group, which offers Islamic insurance solutions, has issued Islamic bonds since last December.
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